Retention of Title (Romalpa Clause)
Category: Legal
Also searched as: Romalpa clause
Definition (plain English)
A clause intended to let a seller retain ownership of goods until the buyer pays, subject to local law and insolvency rules.
Why it matters commercially
For sellers using open-account terms, retention of title can affect recovery leverage, credit insurance, warehouse handling, and what happens if the buyer becomes insolvent.
Example
An exporter offered net-30 terms only after counsel checked whether the retention-of-title wording would work in the buyer country and with mixed resale stock.
Common mistake
Assuming title-retention wording guarantees recovery without checking jurisdiction, identification of goods, resale, insolvency, and local registration rules.
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