Reviewing a retention of title clause in supplier terms

A retention of title clause keeps ownership of goods with the supplier until the buyer has paid for them, so that the supplier can recover the goods if the buyer does not pay or becomes insolvent. The law recognises the clause, and its usefulness depends on the words used and on what has happened to the goods: goods still in the buyer's warehouse can be recovered, goods sold on, mixed with others or built into something else cannot, and a clause that reaches too far can be void for want of registration. I review the clause from whichever side instructs me and return it marked up with a written explanation of what it reserves, when it works, and the changes the other side will accept, for a fixed fee of £495 in three working days.

Who this is for

Suppliers of goods in England and Wales that want their terms to protect them against non-payment and a buyer's insolvency, and buyers, distributors and contractors that want to know what a supplier's clause lets it do with goods on their premises or in their products. Both parties are businesses.

What to look for in a retention of title clause

What the clause reserves and until when

Section 19 of the Sale of Goods Act 1979 lets a seller reserve the right of disposal of goods until conditions are fulfilled, and section 17 provides that property passes when the parties intend. A simple clause reserves title to goods until they are paid for; an all-monies clause reserves title to all goods supplied until the buyer has paid everything it owes the supplier on any account, which lets the supplier recover goods that have themselves been paid for. The review checks which the clause is, that it applies to every contract for goods the supplier makes, and that the terms containing it are incorporated before delivery.

Goods that have been resold, and the buyer in possession

A buyer that resells the goods in the ordinary course of its business passes good title to its own customer even though it has not paid the supplier, under section 25 of the Sale of Goods Act 1979 and section 2 of the Factors Act 1889, so the supplier's clause should permit resale on that basis and should not attempt to prevent it. A clause that requires the buyer to hold the proceeds of resale for the supplier, or assigns the buyer's receivables to the supplier, is treated as a charge over the proceeds, which is void against a liquidator, administrator and creditors unless registered under section 859A of the Companies Act 2006. The review confines the clause to the goods themselves.

Goods that have been mixed, processed or incorporated

Once goods have been mixed with other goods so that they cannot be identified, processed into a new product, or incorporated into a building or another product, the supplier's title in the original goods is lost, and a clause that purports to give the supplier title to the new product or the building is again a charge. The review advises a supplier on what the clause can protect, identifiable goods still in the buyer's possession, and advises a buyer, particularly a contractor or manufacturer, on what the clause cannot reach once the goods have been used.

The buyer's insolvency and the administrator

Retention of title matters most when the buyer enters administration. A supplier that owns identifiable goods on the buyer's premises can ask the administrator to release them, but under paragraph 43 of Schedule B1 to the Insolvency Act 1986 the moratorium on a company in administration prevents the supplier repossessing goods without the administrator's consent or the court's permission. The review checks that the clause and the supplier's records let the goods be identified by batch or serial number, that the buyer is obliged to store the goods separately and marked as the supplier's, and that the supplier has a right to information about the goods' location.

Entry, repossession and the practical terms

The clause should give the supplier a right to enter the buyer's premises to inspect and recover the goods, to require the buyer to deliver them up, and to terminate the buyer's right to use or resell them on non-payment or insolvency, and should oblige the buyer to insure the goods and to keep them free of charges. The review checks those terms and the supplier's remedy if the buyer refuses to allow recovery, a claim for wrongful interference under section 3 of the Torts (Interference with Goods) Act 1977, and checks that risk in the goods passes to the buyer on delivery even though title has not, which section 20 of the Sale of Goods Act 1979 allows the parties to agree.

The buyer's position and the terms to negotiate

For a buyer, the review confines the clause to identifiable goods, resists all-monies wording where the buyer pays invoice by invoice, removes obligations to store goods separately that the buyer's operations cannot meet, limits the supplier's entry rights to reasonable notice except on insolvency, and preserves the buyer's right to sell and use the goods in the ordinary course. It also checks that the supplier's retention of title does not stop the buyer disputing a defective delivery, and that interest on late payment under the Late Payment of Commercial Debts (Interest) Act 1998 is the supplier's remedy for delay rather than repossession of goods that have been used.

What it costs

Standard review, £495. Marked-up document and a written explanation of the changes. Three working days.

Buying online forms the engagement on payment. The scope is what the contract review page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• Your own contract returned with my amendments as tracked changes, plus a clean version with every change accepted, ready to send to the other side
• Comments in the document where a point needs explaining
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, marking the points I would hold firm on and the ones that are negotiable
• A view on what is normal market practice and what is the other side pushing their luck
• One round of follow-up questions by email, included

What is not included

• Negotiating directly with the other side, which I quote separately once I know who is on the other side. Where the other side is willing to share a live document, I can work in that document directly
• Drafting a replacement contract from scratch
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Disputes about a contract that is already signed

Questions I am often asked

Our customer has gone into administration with our goods in its warehouse. Can we take them back?

If your clause was incorporated, the goods are identifiable as yours and they have not been paid for, you can ask the administrator to release them, but the moratorium stops you taking them without consent or the court's permission. The review checks the clause and the records and drafts the request to the administrator.

Our clause says we own the proceeds if the goods are resold. Does that work?

It creates a charge over the proceeds, which is void against an administrator and creditors unless registered at Companies House, and suppliers' terms do not register. The review confines the clause to the goods themselves, which is what retention of title can protect.

We are a contractor. Can a supplier take back materials we have built into a building?

Not once they have been incorporated; the supplier's title in the original goods is lost and a clause claiming the building is a charge. The supplier is left with a claim for the price. The review checks the clause against what has happened to the goods.

Related guidance and services

• Contract review, £495, the service this page describes
• Terms and conditions drafting, £995
• Reviewing a trade credit account application with a personal guarantee
• Reviewing a wholesaler's terms of business before opening an account

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.