By Jonathan Fitchen
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Extra resources for Commercial Lawcards 2010-2011
Relevance Romalpa greatly encouraged the use of retention of title clauses by sellers. Subsequently there has been much litigation concerning the effectiveness or otherwise of such clauses (which often fail). After the Romalpa case the retention of title clause seemed to offer the unsecured commercial seller a ‘rough-and-ready’ form of what may loosely be referred to as a ‘security’ against the danger of the buyer’s insolvency. Sellers, unsurprisingly, rushed to include such clauses in their contracts.
If it produces a smaller crop but still enough to enable the seller to supply the contract quantity, the contract will not be frustrated. If it produces a smaller crop so that the seller can supply some but not all of the contract quantity, the seller should offer the buyer the option of either taking the lesser quantity at the contract rate or of not taking any (Sainsbury v Street ). 33 VOID AND FRUSTRATED SALE OF GOODS CONTRACTS ◗ SAINSBURY v STREET  Basic facts The seller agreed to sell 275 tons of barley to be grown on his farm.
The widgets are delivered. Tinte Ltd plans to make the widgets into wodgets and to sell them for a handsome profit from which it will pay Atrox Ltd. Five weeks later Tinte Ltd, which has not yet made the widgets into wodgets or paid 18 RETENTION OF TITLE CLAUSES Atrox Ltd, is declared insolvent. The liquidator must sell everything which belongs to Tinte Ltd to raise the money to pay off Tinte Ltd’s debts. It is usual for such a sale to include all goods previously supplied to the insolvent company which are still in its possession (eg the unpaid-for widgets supplied by Atrox Ltd).