Examining 'Equitable' Retention

Abstract

The operation of compensation, whereby a liquid debt reduces or extinguishes a liquid debt, is well understood, as is retention of a sum due under a contract on the principle of mutuality. Less understood is the doctrine of retention of debts, the so-called “other type of retention” or “equitable” retention discussed in obiter remarks by Lord Rodger in the UK Supreme Court decision in Inveresk plc v Tullis Russell Papermakers Ltd [2010] UKSC 19. This form of “equitable” retention is the subject of a detailed study by Lorna Richardson in this article.