Retention of Title Clause Template for UK Goods Suppliers

What retention of title achieves

When you supply goods on credit, the buyer has possession but you retain legal title until payment clears. If the buyer enters administration or liquidation before paying, a properly drafted RoT clause allows you to recover the goods — or their proceeds — ahead of the buyer's unsecured creditors, who would otherwise share whatever remains in the estate.

Without an RoT clause, goods delivered on credit pass title on delivery by default under the Sale of Goods Act 1979. You become an unsecured creditor, and recovery is likely to be partial at best.

Simple versus extended RoT clauses

A simple RoT clause retains title until payment for the specific goods in question has been received. This is the most straightforward and most enforceable form.

An extended (or all-monies) RoT clause retains title until all sums owed by the buyer to the supplier — across all invoices, not just the invoice relating to those specific goods — are paid. Extended clauses are more powerful but require more careful drafting to be enforceable. Courts scrutinise them closely. Seek legal advice if you want to use an extended clause.

Some suppliers also attempt proceeds clauses, which claim title over money received when a buyer resells the goods. These are legally complex and have had mixed outcomes in English courts. Confirm with your solicitor whether this is appropriate for your situation.

Practical steps to make RoT effective

• Include the RoT clause in your terms of business and ensure it is incorporated before or at the time of each delivery — not retroactively.
• Label goods where practical to make identification in insolvency straightforward.
• Keep clear records linking invoices to specific delivery batches and product serial numbers or lot codes.
• Train your credit control team to act quickly if a buyer shows signs of financial distress — recovering identifiable goods before administration is simpler than making a claim afterwards.
• Note that RoT does not protect you against goods that have been mixed with other materials, processed, or consumed — the goods must remain identifiable and separate.