Law Governing Retention of Title Clauses in England and Wales and Transposing the American Concept of the Purchase Money Security Interest

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Law Governing Retention of Title Clauses in England and Wales and Transposing the American Concept of the Purchase Money Security Interest Introduction In a business transaction taking place in Engl... and and Wales, a merchant may supply goods to a customer on credit with the agreement of payment at a later date. However, failure to make payment will be risky on the side of the supplier and more so when the customer declines leading to insolvency. To mitigate this risk, Retention on Title (ROT) needs to be included as a clause within the contract of sale to cover for any eventualities and scenarios that may occur. Within the contract of sale, the ROT clause means that ownership of the goods is still with the supplier until he receives the full payment of all the goods. Conversely, this is an example of the sale of goods contract and ROT clauses apply to various circumstances. The ROT will help the supplier as documentary evidence that the title remains with them and so can put up the case with an appointed liquidator in enforcing the clause accordingly. The Principles in ROT Under the English law, the parties involved are the deciders of the time the title to goods pass. Therefore, the parties may decide that even when the goods have been materially delivered, the ownership still remains with the supplier. The principle arguments that apply for the retaining of the title of goods are made under the Sales of Goods Act 1979 . As such, to retain title to the goods after delivery some principles including the incorporation of terms, simple or all monies, power of sale, and identifiable goods principle need to apply. Under the incorporation of terms, the supplier should have the appropriate provisions for the retention of title, which will take [Show More]

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