Retention of title

A clause keeping ownership of goods until they are paid for.

What it means

A retention of title clause states that ownership of goods does not pass to the buyer until payment is received in full.

Why it matters

If the buyer becomes insolvent, a valid clause lets the seller reclaim the goods rather than ranking as an unsecured creditor — which usually means getting nothing.

What it looks like in practice

The clause must be incorporated into the contract before delivery, and the goods must be identifiable and unmixed. "All monies" clauses cover the whole account rather than one invoice.

What to watch out for

Goods that have been mixed, processed or resold, where the claim usually fails. And clauses in terms sent after the order, which may not be part of the contract at all.

Where to get proper advice

A commercial solicitor for the drafting, and immediately if a customer enters insolvency — the window to act is short.