Retention of title

Published by a ��ɫ�� Commercial expert

Practice notes

In-house

Retention of title

Published by a ��ɫ�� Commercial expert

Practice notes

In-house

This Practice Note considers Retention of title clauses, also known as reservation of title, ROT or Romalpa clauses. It considers the uses and limitations of retention of title clauses in protecting a creditor-seller from the Insolvency of a debtor-buyer. The Practice Note considers the key elements of retention of title clauses, simple retention of title clauses and extended retention of title clauses including ‘all monies’ clauses and ‘proceeds of sale’ clauses. It also considers some practical matters concerning incorporation of retention of title clauses, Enforcement and alternate routes of protection open to a seller.

What is a retention of title (ROT) clause?

At its simplest, a retention of title clause is a provision in a contract which 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). A retention of title clause is sometimes referred to as a reservation of title clause, ROT clause

Jurisdiction(s):

United Kingdom

Key definition:

Retention definition

What does Retention mean?

Retention is a percentage of the sums payable by way of interim payment deducted by the employer and held until completion. Half of the retention is released on practical completion, the other half on the expiry of the defects liability period or issuance of a certificate of making good defects.

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