Essay example --

The judgment in Romalpa now simply serves as a romantic notion of what a retention of title clause could be. In reality, such clauses are now a far more scrutinised and difficult prospect for the unpaid seller looking for redress. Critically discuss The concept of a retention of title clause (hereinafter, referred to as ROT) can be traced back to late 19th Century in the case of McEntire v Crossley1. But it’s more well-known origins rest in the case of AIV v Romalpa2, so much so that ROT clauses are often known as ‘Romalpa clauses’. The incorporation of a ROT clause into a sale of goods contract allows for a seller to retain title to the goods purchased until some condition by the buyer is satisfied, usually the payment of the price. Such clauses are given effect through sections 17 and 19 of the Sale of Goods Act 19793. Section 17 realises that property will only pass when the parties intended it to do so, while section 18 gives the seller the right of disposal until all the conditions have been satisfied. The intention behind retention of title clauses is to assure the seller that payment will ultimately be made, and if not, the seller can reclaim their goods. The underlying importance of this is that in th e circumstance that a buyer becomes insolvent, an effective ROT clause will allow that seller priority over any other creditors. Prima facie, it can be seen that a ROT clause is a positive mechanism. It confers a sense of security on the seller that if they are not paid for their goods, they will at least get their goods back. However, the clause has been restricted and narrowly interpreted that it has called into question whether a ROT clause is now a more difficult prospect for the unpaid seller looking for redress. To ... ...(Article 9-312(5)(a)). Hence the first creditor to file has the first claim to the assets and accounts.† So long as everyone with an interest in the buyer and their assets plays their part, it appears that their interests will be represented and balance with each other. Monti suggested that ‘Judges should be made conscious of the importance of RTCs in trade and should be made to see the approach of other countries’. The UCC is just one example of how a security system operates, other jurisdictions have been drawn in to highlight that a truly successful reform will involve combining the most positive aspects of each system. Unlike other aspects of the law, commerce is a fast-paced environment, and change must happen soon to provide clarity and focus. Without it trade will be halted, the economy will falter, and the protection of sellers will continue to be overlooked.