Q&As

Can a retention of title over goods be defeated where the goods are not of satisfactory quality?

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Published on LexisPSL on 20/06/2018

The following Commercial Q&A provides comprehensive and up to date legal information covering:

  • Can a retention of title over goods be defeated where the goods are not of satisfactory quality?

Can a retention of title over goods be defeated where the goods are not of satisfactory quality?

This Q&A refers to a retention of title (ROT) clause in a business-to-business contract for the supply of goods.

At its simplest, an ROT clause allows the seller to retain title to goods which it has 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).

Under the Sale of Goods Act 1979 (SGA 1979), property in specific or ascertained goods passes to the buyer when the contracting parties intend it to pass (SGA 1979, s 17) and a seller can, as a term of the contract, reserve the right of disposal (SGA 1979, s 19). The seller may also reserve the right of disposal of the goods after their delivery to the buyer until certain conditions are met. An ROT clause in the contract is evidence

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