Getting paid by customers can be a battle and it is essential that you employ effective tools and tactics to assist in securing payment from debtors.
A well drafted terms of trade can permit the recovery of goods that have not been paid for via retention of title provisions.
In a recent landmark decision, the High Court set down the guiding principles of what is required for a retention of title clause to be effective. It is important that your trading terms and invoicing comply with the principles set out in that decision.
It is also important that you not only have an effective retention of title clause, but that you also take steps to make sure it is “incorporated” into your dealings with the customer. Merely putting a clause on an invoice is often futile – it’s like closing the door after the horse has bolted.
In most instances, a properly drafted and correctly incorporated retention of title clause will allow you to recover your goods (and in some instances recover payment for goods already sold by the customer) if payment has not been made even if a receiver or administrator has been appointed.