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Romalpa Clauses - Contracts

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A Romalpa Clause in a contract provides that until payment is received, title or ownership of goods sold remain with the seller.

In this way, risk of loss and damage pass to the buyer upon delivery, but the title passes to the buyer upon payment in full. 

In other words, he must pay in full in order to get title.

WHAT IS A "ROMALPA" CLAUSE?

The use of "reservation of title" clauses (or, as they are commonly referred to, "Romalpa clauses") has become widespread in the sale of goods. Under this type of clause, the seller retains ownership of the goods until full payment has been made, but the buyer is allowed to take delivery of the goods. If the buyer does not pay, the seller can therefore take possession of the goods.

SIMPLE CLAUSES

An example of a simple clause would be:

"Property in the good shall not pass to the buyer until the buyer has discharged indebtedness to the seller for the purchase price of the goods."

This is the simplest type of restraint of trade clause and is basically designed to ensure ownership of the good is retained by the vendor until the purchaser has paid the contract price in full. It protects the vendor in the event the buyer fails to pay for the goods at the agreed time, or is unable to pay the contract price in full due to insolvency.

ALL MONIES CLAUSES

An example of an "all monies" clause is:

"Property in the goods shall not pass to the buyer until the buyer has discharged all outstanding indebtedness to the seller whatsoever."

Basically this type of clause reserves property in goods pending payment by the purchaser to the vendor of all monies owing on any account, regardless of whether monies are owing in relation to the specific goods held by the purchaser.

THE COMPLEX CLAUSE

An example of a complex ROT clause is:

"The ownership of the material to be delivered by the seller will only be transferred to the purchaser when he has met all that is owing to the sellers

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"Membership No 186685
I have been unable to acquire any case law in regards to bankruptcy. I am thge alleged defendant in the matter and have opposed the application for bankruptcy as I am not the defendant. The case is now at the stage of the high court requiring a synopsis under 251a, I wish to make submissions in not being notified of the hearing at the district court after the notice of proceeding was served. The matter then got judgement without my knowledge and is now before the high court for bankruptcy. Please advise the procedure to locate any supportive case law that may assist with my application to set aside the bankrupcy claim.

Kindest Regards
A.Marsh
I "

"You will certainly get a rehearing if you were not notified but, if you simply misread the documents you were originally served with then you could be in trouble. You must actively follow up on your obligation to file and serve a defence and not just wait for the Court to come to you. Good luck . . . Netlaw "
"Likewise . . . very helpful. Thanks. Gerald - May 2007 - Tauranga"
"Received notice from a creditors lawyer that they wish to put in companiy into liquidation and I have up to today upon receiving their letter. A Statory Demand was intially sent on 7 Aril 2008, which I reponded with a reply explaining that an arrangement (verbal) had been entered in by both parties which was to continue supply, once company got post dated cheques, company stopped surpply and but still continued to present cheques which was not the agreement which was entred into.
What position does that leave me if I want to legal challenge this. Without causing me excessive expresses.

Rina

Netlaw responds: If you say that they cannot properly sue because there was a new agreement for time payment, then you can apply for an injunction saying that the Statutory Demand Notice is wrong. But it will cost you. An injunction should not be done without legal advice. Type up a Statement setting out precisiely all the facts as you know them and see a lawyer as soon as possible. A letter shouid be sent to the other side saying how inappropriate the Demand procedure is when the subsequent agreement between the parties was made and kept by you. But you must get your facts right!"

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"I found all these contract topics interesting and helpful. JD. Napier December 2006"
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"I found this interesting. I want to sue for punitive damages and I was interested to learn that our courts are pretty conservative. I think the Welfare have quite wrongly taken my kids and I have found out that the affidavit they gave to a Judge to get an order to uplift them was known to the Welfare to be incorrect. They told the Judge that I had drug convictions but when I found out 5 months ago that they thought that I proved then to them that this was untrue yet I have now found that they have still put this false evidence in an affidavit. But they have also told other people about my "drug convictions". You have to watch these people. (name witheld) - May 2007"
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