Can I remove goods not paid for? ✔️ 3 things to consider
Common FAQ – Can I remove goods not paid for?
Can I remove goods not paid for is a question we hear very often. The rights of a supplier to remove goods not paid for depends on if there is a retention of title clause in their terms. Hopefully this helpful article will answer some of the questions surrounding this common business query and help clear the mist.
Can a supplier reclaim stock that’s not been paid for
Commercial transactions between businesses can sometimes work via credit facilities provided by the supplier. Normally these terms are between 30-90 and differ from sector to sector. This is the preferred method of business for many companies as it assists with maximising cash-flow. Very often it allows them to be paid by their customers before they need to pay their suppliers.
Normally this kind of process works well for all parties but sometimes it can hit the buffers. Its not uncommon for customers to not pay invoices on time despite the goods being already supplied. You may think the simplest option is for the goods to be returned but they could have already been sold on. Dependent on the goods in question, their state may have altered or decayed with time rendering them worthless.
Even if the goods are in their original state, the supplier may not be under any obligation to take them back. The goods have been supplied in good faith and terms of payment given. Sometimes though, it may be the only option and poses the question to many business owners; can i remove goods that have not been paid for.
Essentially, there are two main points to consider.
Was there a retention of title clause within the original agreed terms? A basic retention of title clause within a contract of sale basically means the goods remain the property of the supplier till paid for.
If so, are the goods supplied still in their original state and able to be resold?
If the answer is no to either of those questions, then that really is not an option. No will be the answer to the question Can I remove goods not paid for. Firstly, because there is no legal basis on which to reclaim the goods and secondly, would you want to reclaim goods that are now effectively worthless.
What is a retention of title?
A retention of title clause is a contractual provision which states that the legal title of goods remains with their seller until the buyer has paid for them in full. This allows a seller to reclaim their goods if the buyer fails to make payment.
A retention of title protects a supplier from not being paid effectively. It is a clause within the suppliers contract that means the ownership of the supplied goods remains that of the supplier until the goods are paid for in full. This payment is normally made within the agreed terms of 30 days, 60 days or 90 days.
If payment of the invoices or account is not made then the supplier is within their rights to remove the goods from the premises. Even if a formal contract was not signed, if a supplier can prove that the customer was aware or had been furnished with the suppliers terms and conditions, then the clause can still be enforceable in many cases.
I don’t have a retention of title clause
If there was no retention of title clause in your terms, then unfortunately under the Sale of Goods Act 1979, it means the items or goods become the property of the customer.
Turning up at a customers premises or property and trying to remove goods, could effectively be construed as attempted theft and therefore a criminal offence. It is better to seek options to recover the money that is owed to you by lawful and professional means.
At Federal Management, we deal regularly with businesses that have supplied goods but not been paid. Every day we hear of such scenarios. Speak to our professional new business team today in full confidence. We are happy to advise any Business that finds themselves in this situation.
We are specialist B2B Debt Collection experts and can offer advice. There are many different situations where this can arise. Ensuring your supporting paperwork is in order to prove the debt is a good starting point. A free appraisal from one of our friendly team and provide insights into solutions for your problem.
If you have supplied goods and they have not been paid for let the experts help. If you are asking yourself; Can I remove goods not paid for? it is always better to seek professional advice.