One of the fundamental differences between Article 9 and English law lies in the treatment of conditional sale agreements, or reservation-of-title clauses, as they are referred to in England. Under Article 9 basically all conditional sale agreements come within the functional definition of security and perfection by filing is required. In England, on the other hand, some kinds of reservation-of-title clause constitute a registrable charge whereas others do not. This chapter will compare and contrast the English and US positions pertaining to reservation of title with particular reference to registration/filing requirements. In its consultation paper on Registration of Security Interests the Law Commission recommended that all retention-of-title clauses should be registrable; but as a partly counterbalancing measure, the Commission canvassed the possibility that at least simple retention-of-title clauses should enjoy super-priority status, i.e. such clauses would rank ahead of pre-existing security interests granted by the debtor which contain an after-acquired property clause.

Background

A reservation-of-title clause is a provision in a contract for the sale of goods under which the seller keeps to itself title to the goods until some condition specified in the contract has been fulfilled. Such provisions are also referred to as retention-of-title clauses, or Romalpa clauses, and in this chapter the various expressions are used interchangeably. The seller is ‘retaining’ or ‘reserving’ title. The phrase ‘reservation’ comes from section 19 of the Sale of Goods Act 1979 which is headed ‘reservation of a right of disposal’.