Q&As

What makes a valid retention of title clause?

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Published by a ÀÏ˾»úÎçÒ¹¸£Àû Commercial expert
Published on: 03 January 2019
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At its simplest, a Retention of title clause is a provision in a contract which allows the seller to retain title to Goods which they have delivered to a buyer until the buyer has paid for them in full or, where permitted to do so, sold them on to a third party (Aluminium Industrie Vaassen v Romalpa Aluminium).

A valid retention of title clause gives a seller Priority over secured and unsecured creditors of the buyer if the buyer fails to pay for the goods where it is insolvent or for other reasons specified in the clause. The clause should give the seller the right to recover the goods from the buyer. As title will not have passed, the seller, once it has regained possession, will have the right to sell the goods to another buyer.

A retention of title clause must be

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Retention definition
What does Retention mean?

Retention is a percentage of the sums payable by way of interim payment deducted by the employer and held until completion. Half of the retention is released on practical completion, the other half on the expiry of the defects liability period or issuance of a certificate of making good defects.

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