Retention Of Title Clause Template
A retention of title clause keeps ownership of goods with you until you're paid — one of the strongest protections a supplier of goods can have.
What's included
- Understand what retention of title achieves
- See sample wording for a basic and extended clause
- Appreciate the link to PPSR registration
- Recognise the limits of an unregistered clause
- Know when to seek advice on enforceability
7 min read
The clause
This is general sample wording for a retention of title (RoT) clause within terms for the supply of goods. Replace each [placeholder] and tailor to your business.
RETENTION OF TITLE
(a) Ownership of goods we supply ('Goods') stays with us until you
have paid us in full for those Goods and all other amounts you
owe us on any account.
(b) Risk in the Goods passes to you on delivery, even though title
has not passed.
(c) Until title passes, you must store the Goods so they are clearly
identifiable as ours and keep them insured.
(d) If you do not pay on time or become insolvent, we may enter your
premises (where lawful) and retake the Goods, and you authorise us
to do so.
(e) Extended clause (optional): if you sell the Goods before paying
us, you hold the proceeds on trust for us up to the amount you owe.
(f) You acknowledge these arrangements may create a security interest
that we may register on the Personal Property Securities Register.Registration changes everything
A retention of title clause on paper is only part of the picture. In Australia, these arrangements typically create a security interest, and whether your interest survives a customer's insolvency often turns on whether it was correctly registered on the PPSR — and registered in time. An unregistered or late-registered interest can be defeated, leaving you as an unsecured creditor despite the clause. The wording and the registration go hand in hand.
How to use it
Include the clause in your standard terms of trade so it applies to every supply, and put PPSR registration into your onboarding process rather than treating it as an afterthought. Keep goods identifiable and records tidy so you can actually act on the clause if you need to. Where a customer who holds your goods has stopped paying, you can also refer the debt while you consider your security position.
Not legal advice
This is a general template and general information only — not legal advice. Retention of title and PPSR registration are technical areas where small errors can defeat your protection. Have your clause and registration approach reviewed by a lawyer before you rely on them.
Tips
- Retention of title keeps ownership with you until you are paid.
- It usually creates a security interest that should be registered.
- An unregistered interest can be defeated in insolvency.
- Wording and PPSR registration must work together.
FAQ
Is the clause enough on its own?
Often not. Without correct, timely PPSR registration your interest may not survive the customer's insolvency. This is general information, not legal advice.
What is an 'all monies' clause?
Wording that retains title until everything on any account is paid, not just for the specific goods. It is broader but should be drafted carefully.
Does retention of title apply to services?
It applies to goods. For services, other protections such as payment and default clauses do the work.
Templates are a head start — not legal advice
Customise to your business and have important documents reviewed. Need to recover a debt? We can help.