- Romalpa clause
a clause in a contract modelled on the clause that was upheld in the English Court of Appeal in the case Aluminium Industrie Vassen BV v . Romalpa Aluminium  1 WLR 676. There are two main elements:(2) (1) retention of title. Because of the rules on passing of property in sale, it is possible for parties to stipulate that property shall not pass until the seller has been paid. The controversial idea was to say that property should not pass until all sums that might be due to the seller have been paid. This could mean that the actual price of the actual goods delivered has been paid but because of an unpaid debt in relation to some other transaction (even a transaction by another company in the same group) the property has not passed. The importance of this commercially is that if the buyer becomes insolvent (insolvency) then the seller has a right to reclaim the property in question and it does not fall into the hands of the creditors. This is frequently much better than simply ranking for a dividend. The concept has now been recognised in the Scots law, which had previously refused to recognise such clauses as constituting security without possession: Armour v. Thyssen 1991 SCLR 139;(2) the other main component of the clause involves a trust provision. This is to cover the situation where the buyer uses the goods and sells them on. Because of the retention, the property the buyer used to sell on was truly that of the seller and the trust provision seeks to make the buyer hold the money on trust for the seller. Because of the tantum et tale rule, should the buyer become insolvent the sums so collected have to be accounted for to the seller and do not form part of the insolvent estate. See Re Bond Worth Ltd  Ch. 228, Re Andrabell Ltd  Ch. 131.
Collins dictionary of law. W. J. Stewart. 2001.
- Romalpa clause
See retention of title.
Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010.
Look at other dictionaries:
Romalpa clause — A clause included in a contract of sale in which the seller retains the title of the goods sold until they have been paid for. This is of importance to accountants as it may affect the ownership of stocks; it is essential to determine whether the … Accounting dictionary
Romalpa clause — A clause included in a contract of sale in which the seller retains the title of the goods sold until they have been paid for. This is of importance to accountants as it may affect the ownership of stocks; it is essential to determine whether the … Big dictionary of business and management
Romalpa clause — noun a clause in a contract, whereby the seller provides that title to the goods does not pass to the buyer until the buyer has paid for them COMMENT: Called after the case of Aluminium Industrie Vaassen BV v Romalpa Ltd … Dictionary of banking and finance
Title retention clause — A retention of title clause (also called a Romalpa clause in some jurisdictions [Named after the decision in Aluminium Industrie v Romalpa  1 WLR 676] ) is a provision in a contract for the sale of goods that the title to the goods remains… … Wikipedia
retention of title — A seller of goods will often wish to retain ownership of goods until the money for those goods (or even all money owed to him by the buyer) has been paid. In addition he may seek to recover possession of the goods if the buyer becomes insolvent… … Law dictionary
reservation of title — See Romalpa clause. Collins dictionary of law. W. J. Stewart. 2001 … Law dictionary
reservation of title — A sale of goods in which the seller retains title to the goods sold, or any products made from them, or the resulting sale proceeds, until the buyer pays for the goods. See also: Romalpa clause … Accounting dictionary
reservation of title — A sale of goods in which the seller retains title to the goods sold, or any products made from them, or the resulting sale proceeds, until the buyer pays for the goods. See also Romalpa clause … Big dictionary of business and management
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