Ownership Retention Terms in Sale Contracts Gone Astray: PST Energy 7 Shipping v.O.W. Bunker Malta Limited

Abstract

‘Title retention Clause’ was introduced in sale of goods contracts to prevent the transfer of ownership till the seller was fully paid. Exigencies of businesses have led to introduction of further clauses allowing the buyer to use or sub-sell the goods even before the transfer of ownership. The conflicting provisions, as the judgment of the United Kingdom Supreme Court in PST Energy 7 Shipping v O.W. Bunker Malta Limited brings out, changes the very character of the contract. The contract fails to be a contract of sale of goods depriving the parties of the valuable rights.