The Two Sides of the Title Retention Clauses: The Caterpillar Case

Abstract

Contracts term of commercial sale of goods have a ‘title retention clause’, preventing the transfer of ownership till the seller is fully paid. The unpaid seller gets the right to repossess the goods from the buyer. Exigencies of businesses have led to introduction of further clauses allowing the buyer to use or sub-sell the goods even before the transfer of ownership. The United Kingdom Court of Appeal judgment in the Caterpillar Case brings out the effects of the contradictions of a title retention clause qualified by the right of the buyer to use or sub-sell.