Retailer Insolvency and Rights of Goods Suppliers

It was reported that in the light of the liquidation of long-surviving departmental store Robinsons, goods suppliers have been experiencing issues with payments for sold consigned goods.

What has not been considered in these reports is that suppliers who consigned goods to Robinsons should consider if it is indeed a consignment at law and whether title or property of goods have passed to Robinsons, or if not then whether they can take back the goods.

In particular, the circumstances of the purported consignment may have to be analysed under the Sale of Goods Act and on the contractual terms of any consignment agreement, including whether retention of title clauses apply. If title is retained by the consignor, it may be able to assert the right to repossess goods.

Or if even if the goods were not on consignment, but the goods delivered have been unpaid, and if Robinsons is insolvent, etc., the supplier should consider whether it can exercise a lien (hold on to possession of the goods) over unpaid goods under the Sale of Goods Act.

Otherwise, once the goods have been sold, the supplier will become unsecured creditors in respect of the sale proceeds. In a liquidation, they rank very low in terms of priority of taking a share of the residual assets and will probably receive very little of the proceeds.

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