Retention of title clauses: protection available to sellers

Legal Guides

A major concern for any seller is that they will part with goods and then not be paid for them. Many people are not aware that as a general principle, ownership in goods passes when the goods are delivered to the buyer, irrespective of whether payment has been received. An even greater concern is that the buyer may become insolvent before making payment. Whilst a solvent buyer can be sued for the price, in a bankruptcy or liquidation the seller will join the other unsecured creditors who, in many insolvencies, emerge with only a fraction of what is owed to them, or even with nothing.