Retention of title clauses – how effective is yours?

ISHER FASHIONS UK v JET STAR RETAIL [2010]

This case suggested that a retention of title clause (often known as a ‘ROT’ clause) may not be effective if its operation is inconsistent with the overall trading relationship between the parties, such as where it appears in a contract for the supply of finished goods intended for immediate resale.

There are two basic types of ROT clauses:

'All monies' clauses are typically favoured because they are wider in scope. However, there is an obvious problem with ROT clauses where it is intended that the goods supplied are to be sold on to customers in the ordinary course of business, particularly where there is an on-going series of transactions and revolving credit with a number of invoices outstanding at any given time.

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points to note:

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