We were instructed by a Liquidator to advise on an ROT claim he had received from a creditor in relation to a large proportion of the company's stock. The ROT clause purported to create an "all monies clause" which in other words meant that title to the goods supplied would not pass to the buyer until all of the monies owing to the seller were paid in full. Case law has shown that an all monies clause is unlikely to be effective in the context of an agreement to supply finished goods for immediate resale and it was clear that in this case the "all monies" clause clashed with the revolving nature of the stock supplied. We advised on the facts that if the clause was ineffective then it could be severed from the contract terms. Further, because the "all monies" clause was part of the substantive ROT clause then any severance of the "all monies" clause would also sever the ROT clause as well. Our starting point therefore was that the goods supplied were not subject to ROT at all which enabled the IP to negotiate with the supplier on extremely favourable terms.
We were approached by the director of a company that was owed a large sum of money by a customer that had gone into liquidation. The stock that had been supplied to the customer was subject to ROT. We advised on the validity of the ROT clause and were able to successfully recover all of the stock that was subject to ROT from the liquidator.