Retention of Title,Liquidation,Receiver,Liquidator,Ireland,- Myles & Co. Solicitors.

What is Retention Of Title?
By using a properly drafted retention of title (ROT) clause you can retain ownership of the goods you supply until you have been paid in full. There are some circumstances where this does not apply. We will discuss them below. You will appreciate the value of a ROT clause when the company to whom you have sold a large quantity of goods goes into liquidation before you receive payment.
If you do not have a ROT clause then there may not be sufficient funds in the company to pay you.
The valuable lesson is do not cut corners with a ROT clause. Have it drafted by an experienced solicitor. Have your existing ROT clauses reviewed by an experienced solicitor today.

What are the main elements of a successful ROT claim?
First of all make sure that your ROT clause is legally correct. Have it prepared by a solicitor.
Then make sure that it has been made part of the contracts with the purchaser.
You must be able to identify your goods.
If you use a simple ROT clause you will have to identify the goods which have been supplied against specific invoices.
An all monies clause is a more effective method of ensuring protection of your goods.You retain title in goods delivered until all monies due to you have been paid.

Incorporating ROT Clauses into your Standard Terms of Trade
You should always have terms of trade. If you don't have them contact us today contact us to discuss customised terms to suit your business.
You need to be able to prove that the buyer has accepted your terms.
The simplest way to do this is at the start of the business relationship. Have each customer fill in a credit application form which will contain all of your terms of trade. A signed copy of this is usually sufficient proof, provided the terms have not been subsequently altered. If in doubt, just ask us.

Can you identify your goods?
This is not always as easy as it sounds. Provided the invoice refers to a batch number, or other unique method of identification, and the goods retain the number, it can be relatively,straight forward. It becomes difficult where a unique identifier is missing or was never there in the first place. It may be open to the debtor to claim that he obtained the goods from another supplier.If the goods in question have been used to produce the finished product or have been otherwise used in the manufacturing process a claim for ROT will not be successful.

What can I do if the company is in liquidation or receivership?

While there is a difference between a receiver and a liquidator the process of claiming under retention of title is very similar from a suppliers viewpoint.We will use the term liquidator as applying to either. One major point to remember is that most liquidators are paid on the basis of the amount of funds they recover for the company.
When you receive notification of a liquidator's appointment you should collect all of the documents which you will need to prove your claim. These may include invoices, delivery notes and acceptance of terms of trade.You then should visit the premises where your goods are stored and explain to the relevant person that you are a creditor and you intend to enforce your retention of title claim.

You will usually be allowed onto the premises to conduct an inventory of your goods. You should point out to the staff member the identifying features of your goods.e.g. Your invoice may refer to a batch number, you would then point out the batch number on the goods.You should have the inventory list signed by the liquidator's staff member and provide a copy for the liquidator.

Negotiate or litigate.
When you have identified your goods you should then notify the liquidator in writing of your claim. Make sure that you enclose copies of the documents necessary to prove the claim,terms of trade,proof of their incorporation and copies of unpaid invoices.You are either seeking return of the goods or payment.
What happens next is usually like a game of cat and mouse. The liquidator will consider all claims in consultation with his solicitor.
He/She, may offer to pay less than full value for the goods.
It is at this point that you have to make a realistic assessment of what is best for your business.How would the sale of your goods be affected by the liquidator releasing your items at below cost? What would be the cost of collecting/ cleaning the goods? The benefit of going to court, this will depend on the value of the goods as well as the chance of success. You should discuss this with your solicitor before making any decision.

To do now
Immediately review your ROT clauses. Are they fit for purpose? Contact Myles & Co Solicitors for advice on up to date terms and conditions, tailor made for your particular circumstances. In the past some businesses just copied terms from another company's invoices in an effort to save money. When the terms failed and the goods were not recovered the true value of cheap advice was painfully discovered. Do not be a cheapskate. Your goods are valuable. Protect them with terms drawn up by an experienced solicitor.An ounce of prevention is better than a pound of cure. Taking action now will prevent a lot of wasted effort later.

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