Retention Of Title: Taking Back What’s Yours?

What is retention of title?

A retention (or reservation) of title clause is a clause in an agreement whereby a party selling goods seeks to reserve to itself the title in those goods until certain conditions have been met by the buyer, usually payment. The key reason for including a retention of title clause is to give the seller of goods priority over secured and unsecured creditors of the buyer, should he becomes insolvent.

The basic clause provides that title to certain goods is retained by the seller until it has received full payment for those goods. However, in order to be in a position to give full effect to this protection, additional clauses should also be included. For example, in order to avoid committing a trespass, an express right to enter the buyer's premises in order to repossess the goods is necessary. In addition, a clause requiring the buyer to store the seller's goods separately from other goods, to mark them as the seller's property, and to