2 min read
Definition
A retention of title clause states that ownership of goods stays with the seller until payment is received in full, even after delivery. If the buyer becomes insolvent, the seller may reclaim unpaid, identifiable goods ahead of other creditors.
In plain terms
It is the "you can hold my stock but you do not own it until you pay" clause — one of the few real protections an unsecured supplier has.
Why it matters for your company
A well-drafted, incorporated RoT clause can move you ahead of the payment queue for your specific goods. Make sure it is in your terms and properly notified. See unsecured creditor.
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