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Retention of title (ROT)

A clause in supply terms that keeps ownership of goods with the supplier until the customer pays.

Before 2012 a retention-of-title clause protected a supplier on its own. Under the PPSA it is a security interest and only works if registered. An unregistered ROT clause gives the supplier nothing in the customer's liquidation: the goods vest in the customer.

Related terms

  • PMSI (purchase money security interest) — A security interest that secures the purchase price of goods, or a lessor's interest under a PPS lease; it can rank ahead of earlier registrations.
  • Vesting (s267) — The rule that an unperfected security interest passes to the grantor when the grantor becomes insolvent.
  • Registration — An entry on the PPSR recording a security interest; the main way to perfect an interest.

Need this registered, not just defined?

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