Are your goods safe?
Retention of title (ROT) clauses or
"Romalpa"1 clauses have become commonplace in
contracts for the supply of goods.
ROT clauses provide that the property in goods sold does not
pass until the buyer has paid the price for those goods. For
example, a successful ROT clause will mean that the buyer of goods
does not necessarily own the products until it has paid for them,
even if he holds possession of the product.
The purpose of such clauses is to protect the unpaid seller from
the insolvency of the buyer and defeat the claims of other
creditors who hold registered charges over the buyer's
assets.
A simple ROT clause retains ownership of goods in the seller
until payment is made for those particular goods. By careful
wording, the protection afford by a ROT clause can be extended to
address the following circumstances:
