As security against non-payment for goods supplied it is a good idea to ensure you retain legal title to the goods which are sold.

Many businesses are surprised when they learn the sale of goods legislation provides property (ownership) in the goods supplied by you passes to the purchaser upon their delivery, unless the contract specifically provides to the contrary. Unless there is a contrary contractual position the effect of this will mean the purchaser of goods acquires legal title to them upon their delivery, notwithstanding payment has not been made. As the goods legally belong to the purchaser it is not simply a matter for a business to demand their return.

The position can best be avoided by contracting to the effect that the title to the goods will only pass to a purchaser once they are paid for.

A simple retention of title clause can be drafted as follows:-

"Title to the goods supplied shall remain with the seller until such time as the purchaser makes payment in full for the goods supplied and for other goods supplied by the seller to the purchaser. Until title to the goods passes to the purchaser, provided the goods still exist and have not been resold, the seller shall be entitled to demand the return of the goods and if the purchaser fails to do so, to enter the purchaser's premises or those of any third party where the goods are stored and repossess the goods."