Don't Feel the Crunch - Get your Goods Back!
03/03/09
Don't Feel the Crunch - Get your Goods Back!
Tuesday 3rd March 2009
Peter Mardon, Managing Partner, explains how waiting for payment should not be your only option.
Are you finding that your invoices just aren’t being prioritised by your customers? Does your business supply goods? Has your customer gone bust? Wouldn’t it be good if you could just go and get your goods back? With a valid retention of title clause in your terms of business you can do just that.
So what’s the catch? Your customer (or the Official Receiver if your customer has gone bust) will challenge your right to get your goods back unless you comply with what is required by law. If anything is missing you lose out so it’s vitally important to seek advice and be on the ball every time.
Firstly ensure your retention of title clause does what you want it to. So that you can take them back do you want to retain ownership of specific goods until payment has been made for those goods only or until all debts have been paid by your customer? Would a mixture of both be better so that if a court decides one is invalid the other still stands? Do you have the right to enter the customer’s premises? Whatever you choose this area if law is continually evolving so specialist advice is always required.
At AES Winterbothams LLP we are constantly advising businesses of all sizes on their terms and drafting or redrafting them to meet their requirements. The way you do business changes constantly to fit in with increasingly competitive markets and the law is always being amended so you must review your terms regularly. This is particularly important when your terms include retention of title clauses as Official Receivers continue to challenge goods being taken back which could otherwise be sold by them.
Secondly there is no point having an up to date retention of title clause if it does not actually apply. When the contract is entered into your terms of business have to form part of that contract not your customer’s terms. For example, if your customer sends an order over make sure when you acknowledge that order it contains your terms. If your terms are on the back don’t fax the front only!
Thirdly your goods have to be identifiable. If you are one of many businesses supplying sand to a builder you will not be able to identify your sand to take it away. If you are supplying electrical parts with serial numbers on them (and the invoice refers to the serial numbers) or the goods have your name stamped on them it is of course a different matter. If your goods have been made into something else and cannot be taken out of that end product easily (such as material made into clothes) then you can’t get them back.
Lastly act quickly. Be prepared to act decisively at the correct time. If your customer is bust provide as much information to the Official Receiver as soon as possible.
Getting your goods back is one very effective way of beating the current crunch. Speak to the commercial team at AES Winterbothams LLP (01453 847200 or prm@aeswinterbothams.com) about how it can work for you. This article provides a general overview and cannot be relied upon in any particular case.