ABSTRACT

INTRODUCTION This chapter covers the passing of property and risk. It incorporates the topic of retention of title clauses, and also deals with perishing goods.

QUESTION 12 Neon Textiles plc sells silk to various garment makers on terms that require payment 30 days after delivery. About 50% of its sales are to regular customers and the rest are to ‘one-off’ customers. Some of its customers resell the silk, whereas other customers use it in the manufacture of dresses and other garments which are then stored or sold. ◗ Advise Neon Textiles plc on why it ought to consider incorporating a retention of title clause into its standard terms of sale and what protection such a clause might provide.

How to Answer this Question The question invites an explanation of the purpose of retention of title clauses and a discussion of the effects and effectiveness of them. You should approach the question as follows: