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The Importance Of Retaining Title To Goods Until Paid

Reasons to choose Wilson Browne

In times of economic uncertainty such as those we face right now under the current Covid19 pandemic, suppliers of goods should be mindful of the importance of legally retaining title to goods supplied but which have not yet been paid for (the same applies at any time, but now so more than ever).

Retaining title to unpaid goods requires that sellers create a binding contractual position in their terms and conditions of supply, by the use of commonly called Romalpa clauses following the leading case of Aluminium Industrie Vaasen BV –v– Romalpa Aluminium Ltd. The aim of such provisions is to allow a seller to retain ownership and to retake possession of unpaid goods if needed.

To be effective, such clauses must be legally incorporated into the contract for sale, but they must also grant certain rights to the seller and place key binding obligations on the buyer. From the seller’s perspective (as a minimum) the provisions must operate to retain absolute title to the goods and also give the seller a right of entry onto the buyer’s premises to recover the goods without committing a trespass. Typical obligations placed on a buyer would include:

  • storing the goods separately,
  • marking the goods as the property of the seller,
  • and expressly granting the above right of entry.

The current economic climate is at best uncertain – you can’t wind back the clock but you can protect yourself in the future.

We’d suggest that you review you current contracts and get proper legal advice to ensure that you have done everything you can to protect your business.

The Corporate and Commercial team at Wilson Browne Solicitors is ideally placed to help. We can advise on all aspects of commercial contracts, including the effective retention of title for sellers.

For an initial no obligation discussion and review of your existing terms and conditions or other contractual arrangements, please contact Duncan Crowther on 01536 218888 or by email at dcrowther@wilsonbrowne.co.uk.

Duncan Crowther

Posted:

Duncan Crowther

Partner

Duncan is a Solicitor and Partner. He specialises in giving corporate & commercial, and employment advice to businesses and companies throughout the region. Duncan has a background in engineering and is well equipped to understand the most complex of contracts and issues facing businesses.