Retention of title clauses (also known as a reservation of title clauses) are terms commonly found in sale contracts that stipulate that the ownership of goods will not pass to the buyer until the buyer has paid the seller in full.
Whilst retention of title clauses are commonly included in the standard terms and conditions used by businesses, often the clause's effectiveness will be limited by a number of factors. Such factors will include the type of goods supplied, the drafting of the clause, whether the clause and the terms were actually incorporated into the sale contract, and whether the debtor has entered into a formal insolvency procedure.
We can assist businesses with the drafting of retention of title clauses and with ensuring that the clause will be effective in the event that the buyer does not pay for the goods supplied.
Our team also advises businesses on the strengths of their existing retention of title clauses and regularly assists businesses with the recovery of goods supplied under a retention of title clause.
Decisions of the Courts have severely restricted the effectiveness of some retention of title clauses. Therefore, a retention of title clause should be regarded as supplementary to a proper credit control system, not as a substitute for it. Where a business has doubts as to the financial standing of the buyer, the seller should consider its trading relationship with the debtor. This may include re-evaluating the amount of credit provided to the debtor, the taking of alternative forms of security, or obtaining credit insurance.
If you wish to ensure your present retention of title clause adequately protects you, or you wish to introduce such a clause into your trading arrangements, or if you have delivered goods under such a clause but not yet been paid, please do not hesitate to speak to us.
Our Insolvency Team is experienced in advising businesses that face these problems. They would be delighted to speak to you regarding your situation. As we say, we are always there for businesses who are in our BLUE LAW scheme, so we invite you to join BLUE LAW now. Once you have joined, we try to answer any legal enquiries that you have, free of charge. If legal work is needed, we give you a price, and you are then free to "shop around". If you wish to speak to us now, please click on "Please Contact Me Now” or call us on 0800 084 3256. We look forward to always being there for you.
