IVA Glossary
R
Reservation of Title or Retention of Title Agreement
Reservation of Title (or the Retention of Title) refers to a specific agreement in the field of sale of goods by a party to a company. This agreement is not believed to constitute a charge on the goods, so it does not represent a cost to any of the parties involved. Instead, it provides some kind of security to the seller. Under the Reservation or Retention of Title Agreement, the seller is provided with a security of being a prioritized creditor over all the others in case he or she is not paid.
Practically, this reservation agreement protects sellers' rights in case the buyer (the company) does not pay and seems to be unable to do so in the future.
If the seller has a Reservation of Title Agreement, he or she has priority over the company's other creditors regarding the goods or any property of the company.
Usually such a Retention of Title Agreement is not said to be a contract, but it constitutes a provision of a contract of sale of goods. According to this provision, when supplying goods, the seller retains ownership of the goods until these have not entirely been paid. Nevertheless, this agreement has been and will always be an area open to interpretations and changes.
Practically, this reservation agreement protects sellers' rights in case the buyer (the company) does not pay and seems to be unable to do so in the future.
If the seller has a Reservation of Title Agreement, he or she has priority over the company's other creditors regarding the goods or any property of the company.
Usually such a Retention of Title Agreement is not said to be a contract, but it constitutes a provision of a contract of sale of goods. According to this provision, when supplying goods, the seller retains ownership of the goods until these have not entirely been paid. Nevertheless, this agreement has been and will always be an area open to interpretations and changes.
