|Retention of title
||Enables the seller to retain title (ownership) of the goods until the buyer has fulfilled a specified obligation – usually the obligation to pay.
|Right to repossess
||This gives the seller the right to enter the buyer’s premises to repossess the goods. Without this clause, the seller is potentially committing a trespass.
|Right to prevent sale
||A restriction on the buyer which stops them from selling the goods on to a third party until such time as the obligations to the seller have been met.
|Proceeds of sale clause
||This provides for the buyer to account to the seller for the price of the goods in the event that they are sold on to a third party. Such clauses have been considered to imply that the seller has a charge over the goods, rather than retained title and therefore inclusion of this clause needs to be carefully considered.
|Obligation for separate storage
||A seller may wish to stipulate that the goods be kept separate to other goods belonging to the buyer or third parties so that the goods owned by the seller can be easily identified if it becomes necessary to repossess. This clause may also stipulate labelling of ownership and a right for the seller to enter the premises to inspect and confirm whether this step has been taken.
|Obligation not to annex goods
||This clause states that the buyer is not allowed to annex the goods to the buyer’s premises without the consent of the seller.- such as where the goods are heavy plant and machinery.
|All monies clause
||This clause retains title in all the goods supplied by the seller, rather than just those to which the unpaid invoice or unfulfilled obligation relates. It avoids the need to match specific invoices to specific goods if it becomes necessary to repossess any goods for non-payment.
|Mixed goods clause
||This may be used where the goods supplied are then used or coupled with other goods to manufacture a new item, particularly where the goods supplied cannot be easily separated from the new item. This clause gives the seller an interest in the new item – often in the form of a charge.
It is a general principle of contract law that one clause, if found to be unenforceable, can invalidate the entire contract. Contracts often therefore include a severance clause which states that all clauses and sub-clauses stand alone and that in the event one clause is found to be unenforceable, it does not impact upon the validity of the remaining clauses.
|Risk and insurance provision
||It is sensible to stipulate who is responsible for the goods during transit and following delivery. When the seller retains title in the goods, such a clause can stipulate that the risk is transferred to the buyer upon delivery and not upon transfer of title. Depending on the nature of the goods, the seller may also wish to consent to the choice of insurer, the level of cover, and have its interest in the goods communicated to the insurer.
||This clause may give the seller the right to terminate the contract in the event that the seller believes a listed event is about to occur, such as the buyer going into administration/liquidation. This right is however subject to the new provisions introduced by the Corporate Insolvency and Governance Act 2020.