Retention of Title
Law essay
Sally agrees to sell 1,000 tons of polyester fiber to Barry at $10 a ton. She delivers 500 tons under a contract which expressly provides:
“…the ownership of the goods shall remain with the Seller which reserves the right to dispose of the goods until payment in full for all goods supplied has been received by it or until such time as the buyer sells the goods to its customers by way of bona fide sale at full market value.”
The buyer pays $2500 but subsequently becomes insolvent and unable further to perform the contract. Of the 500 tons delivered, 300 tons is still at Barry’s premises unsold and unused but is now worth $4,000, instead of $3,000 as it was at the time of the contract of sale. Sally repossesses the whole 300 tons and re-sells at the new market price.
Discuss
Introduction:
This case study is mainly concerned about issues in the retention of title contracts. And the purpose of this essay is to discuss the extent to which sellers can retain the title of the property they sold. I will approach this problem by, firstly, defining the basis rules and clauses in relation to the retention of title. Then, I will examine the legal effects which would arise from the clauses by looking at the leading case Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd. And apply these effects into the case study in the question. In contract, I will introduce the Re Bond Worth Ltd case in order to demonstrate the effects of a floating charge on the retention of title case. In addition, I will outline some other possible outcomes which might be concluded depending on different situations based on precedent cases. And suggest some other clauses which the seller may want to include in their contracts in order to prevent themselves from exposing to more risks. Finally, I will come with an evaluation by discussing the significance of remedies analyzed.
Main body:
To start with, it is important that we understand the definition of the retention of
Sally agrees to sell 1,000 tons of polyester fiber to Barry at $10 a ton. She delivers 500 tons under a contract which expressly provides:
“…the ownership of the goods shall remain with the Seller which reserves the right to dispose of the goods until payment in full for all goods supplied has been received by it or until such time as the buyer sells the goods to its customers by way of bona fide sale at full market value.”
The buyer pays $2500 but subsequently becomes insolvent and unable further to perform the contract. Of the 500 tons delivered, 300 tons is still at Barry’s premises unsold and unused but is now worth $4,000, instead of $3,000 as it was at the time of the contract of sale. Sally repossesses the whole 300 tons and re-sells at the new market price.
Discuss
Introduction:
This case study is mainly concerned about issues in the retention of title contracts. And the purpose of this essay is to discuss the extent to which sellers can retain the title of the property they sold. I will approach this problem by, firstly, defining the basis rules and clauses in relation to the retention of title. Then, I will examine the legal effects which would arise from the clauses by looking at the leading case Aluminium Industrie Vaassen BV v Romalpa Aluminium Ltd. And apply these effects into the case study in the question. In contract, I will introduce the Re Bond Worth Ltd case in order to demonstrate the effects of a floating charge on the retention of title case. In addition, I will outline some other possible outcomes which might be concluded depending on different situations based on precedent cases. And suggest some other clauses which the seller may want to include in their contracts in order to prevent themselves from exposing to more risks. Finally, I will come with an evaluation by discussing the significance of remedies analyzed.
Main body:
To start with, it is important that we understand the definition of the retention of