Documents for Business

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Introduction to this document

Letter to liquidator

A business has gone bust owing you money and all seems lost. However they’ve not paid for the goods that you sold them. Use our letter to set the wheels in motion to help you try to recover your unpaid goods.

Check the small print

In order to stand any chance of getting your goods back if a buyer goes bust, it’s vital that your terms and conditions contain what’s known as a “Retention of title” clause (ROT), i.e. a clause saying that the goods remain your property until they’re paid for. Without this, you’ve no chance of getting them back from the liquidator.

As well as having a Rot in your contract, you must always ensure that the buyer is aware of the terms of your contract before the deal is concluded. If it’s after the event, e.g. on the back of your invoice, it’s too late. The only exception to this principle is if you’ve been doing business with someone for a long period of time. Then you can argue that your terms and conditions have been incorporated into the contract by virtue of a “regular course of dealing”. Failing to incorporate your Rot into the contract is the number one method used by liquidators to reject claims for the return of goods that aren’t paid for.

All mixed up

Don’t forget either, that no matter how strong your Rot claim is, it will not succeed if your goods can’t be specifically identified, either because they’re mixed in with other goods or they’re attached to something else and can’t be separated without causing damage.

Don’t make the mistake of thinking that as soon as the buyer goes belly up, you can simply force entry onto their premises to retrieve your goods. You’re not permitted to make a forceful entry to premises under any circumstances. Whether or not you’re even allowed access all depends on whether your Rot clause grants you a “licence” to visit the buyer’s premises. If you find yourself in this position, get in touch with the liquidator to lodge your interest in the stock with a view to arranging a convenient date and time to collect your goods.