This Retention of Title and All Monies Clause, also known as an All Sums clause, allows for a supplier of goods to transfer possession of goods which have not yet been paid for, for example goods supplied on credit, whilst ensuring that he retains legal and beneficial title in the goods until the buyer pays for them. Due to the inclusion of the all monies element, title in the goods will not actually pass until all debts owed by the buyer to the supplier, howsoever created, are paid off.
The all monies clause is particularly useful for situations where the buyer will be purchasing a number of consignments of goods, as there is no need to determine which goods relate to which contract or invoice, as title will not pass in any goods subject to the all sums clause until payment is received in respect of all of them.
Whilst such a clause should not be used as a replacement for a credit checking system, it will provide an added layer of protection for the supplier in the event that the buyer fails to pay and is in danger of becoming bankrupt or insolvent.
This clause template allows the seller to enter the buyer’s premises for the purposes of inspecting or removing goods in which legal title has not yet passed (i.e. for which payment has not been made), and places an obligation on the buyer to ensure that the goods which are the subject of the clause are kept separately and are clearly identified as the goods of the seller.
Whilst the seller will benefit from the reservation of legal title in the goods, the buyer will still bear the risk in the goods and will be obliged to insure them against damage or loss.
This Retention of Title and All Monies Clause is not suitable for situations where the buyer is likely to either sell the goods on or use them in a manufacturing process. For these situations the more complex clauses allowing for the recovery of the proceeds of sale and/or acquisition of title of resulting goods should be used.
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