Retention of Title in the House of Lords: Unanswered Questions
| Published date | 01 September 1991 |
| Date | 01 September 1991 |
| DOI | http://doi.org/10.1111/j.1468-2230.1991.tb02665.x |
CASES
Retention
of
Title
in
the House
of
Lords:
Unanswered Questions
Robert
Bradgate
*
The retention of title clause is now commonplace
in
commercial transactions but
despite a decade and a half of commercial usage, and at least nine reported cases,
the effectiveness of any particular clause
will
often be difficult to predict, since
it
will
depend
on
the wording of the particular clause and the circumstances of the
contract
in
which
it
appears.’
One particularly difficult area has been the effectiveness of the so-called ‘all monies’
clause. Under a simple retention of title, the seller retains
title
to goods supplied
under a particular contract until he receives the price for those goods. The effective-
ness of such a clause was established by the decision of the Court of Appeal
in
Clough
Mill
Ltd
v
Geofsrey Martin,*
although
it
seems that an attempt to extend
the seller’s protection by laying claim to proceeds of sale of his goods, or
to
new
products manufactured from his goods,
will
probably fail.3 An ‘all monies’ clause
seeks to extend the seller’s protection
in
a different way; the seller retains title to
goods supplied under the contract
until
he is paid not just their price but also other
sunis due from the buyer. Many different forms
of
such clauses are
in
use; the seller
may retain title
until
payment of ‘all sums due at the time of this contract’ or ‘all
sums due at the time of payment’ or ‘all sums due to us on any account at any time.’
Although
in
several of the reported cases4 the clauses in question were of the all
monies variety, each of those cases was argued and decided on a different point,
without consideration of the special problems of an all monies clause. Now, at last,
the House of Lords has considered the validity of such a clause and has pronounced
it
effective. Howcver, for reasons which
will
become apparent, the decision is rather
unsatisfying.
The
Armour
Case
In
Arntour
v
Thyssert
Edelstuhlwerke
AG3 the appellants, Thyssen, a German
company, had supplied steel strip to Carron Co Ltd, a Scottish company, on terms
which included
a
rctention
of
title clause which provided that:
~~
*Lecturer
in
Ltiw,
Unit
for
Commercial Law Studics, University
of
Sheffield
I
2 Above.
3
See
Goff
IJ
in
Clough
Mill
Ltd
v
Martiti
[
19841
3
All
ER 982. For discussion of the different typcs
of
clause
in
use
see
Spcncer, (1989)
JEL
220.
See
re
Andr(ihell
Ltd
[
19841
3
All
RR
407,
E.
Pfeiffer
Weitikellerei- Weiriekaiij
GmbH
v
Arbuthnott
Factors
Ltd
[
IYRX]
I
WLR
150;
Taritrig
(UK)
Ltrl
v
Galex
Telesure
Ltrl(19891 5 BCC 325 (proceeds
of
sale);
Borrlen
(UK)
Ltd
v
Scottish
Tintber
Prodircts
Lfd
1198ll
I
Ch
25,
and dicta in
Clougk
Mill
Lid
v
Martirr
119841 3
All
EK
982 (products).
The
clauses
in
Aliiwii~iiitni
Iiiditstrie
Vnnseri
BVv
Roninlpu
Alitnriniirrii
bd
[
19763 2
All
ER
552;
Borden
(UK)
Ltd
v
Scottish
‘IFwiber
Products
Ltd
[
19811
I
Ch 25, and
Snow
v
Woodcrofr
[
19851
BCLC
12
were
of
this ~ypc.
119901
3
All
ER
481.
4
5
726
Uie
Moderti
Ltiw
Revicw
54:s Scpternhcr 1991 0026-7961
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