Equity and Trusts - Goods Supplied on Credit

Question 1

What is the name of the thing that allows a supplier to hold onto the title of property until a later event (usually full payment) has occurred?

Answer 1

Retention of Title Clause - s.19 SGA 1979

Question 2

What is the effect of a retention of title clause?

Answer 2

Gives the seller a proprietary right over the property. This gives them priority over unsecured creditors in the event of insolvency (Romalpa). (They can recover it)

Question 3

Can a supplier recover the proceeds of sub-sales, as well as the original material supplied in the event of insolvency?

Answer 3

Original position under Romalpa: Yes, can trace (Re Hallett)

Subsequent case law: No

Question 4

Resin ceased to exist once transformed into chipboard, so profits from this sub-sale were outside the ROT clause and not recoverable

Answer 4

Borden v Scottish Timber Products

Question 5

Cutting leather is an irreversible manufacturing process

Answer 5

Re Peachdart