Romalpa Clauses

Romalpa clauses derive their name from Aluminium Industrie Vaasen BV v Romalpa Aluminium Ltd (1976) and are essentially retention of title clauses or reservation of title clauses.

Under this kind of clause, the seller retains full legal ownership until the buyer has paid in full. The buyer is allowed, til then, to possess the goods without legal ownership. The Romalpa clause avoids the effect of the 1908 Sale of Goods Act which presumes that ownership of the goods passes to the buyer when he delivery is effected. This is important because, in the case of the buyer becoming insolvent, the seller can retain the goods without having to contest the relevant creditors.

The Personal Property Securities Act 1999 has, to an extent, eliminated this advantage. It requires interests to be registered on the register if the seller is to be protected. Should this NZ development be implemented in UK law, or are the judicial mechanisms giving non-effect to Romalpa clauses enough?