KEYTAKEAWAYS
Explore the concept of Retention of Title (ROT), a contractual provision allowing buyers to possess property without full ownership until they make complete payments.
CONTENT
DEFINITION
Retention of Title (ROT) – A Contractual Provision Delaying Ownership Transfer Until Full Payment
Retention of Title (ROT) is a contractual provision commonly found in agreements, particularly sales contracts, where a buyer receives goods or property but does not assume full legal ownership until they have made the complete payment. This arrangement ensures that the seller retains the right to reclaim the property in case of non-payment or default by the buyer.
The ROT clause serves as a form of security for the seller, safeguarding their interest until the buyer fulfills their payment obligations. This practice is prevalent in various industries, providing protection to sellers who release goods or assets to buyers on credit terms.
