In most contracts for the … of goods or products it is a good idea to include a retention of title clause. This clause is intended to … the seller from a buyer who does not pay for the goods, or only pays in part. The clause will state that the goods remain the … of the seller until the buyer has actually paid for them. If the buyer does not pay for the goods he or she is a … which is a person who owes money to someone. A retention of title clause will also usually give the seller the right to enter onto the debtor's … and take back goods that have been delivered but not paid for. However, sometimes a particular difficulty arises in this situation. What happens if the debtor was paying for the goods in …? Let's say the debtor has paid half of the total price of the goods and insists that he or she therefore has a legal right to keep half of the goods? The answer for the seller is to include what is called an 'all monies' provision in the contract of sale. This is a provision which states that until a buyer has paid everything that he or she owes to the seller, then the seller … ownership of all of his or her goods in the buyer's possession. This means that the seller can take back goods even in cases where the buyer claims that he or she has paid for those … goods.
sale
protect
property
debtor
premises
instalments
retains
particular
To include something as part of a design, a plan or a document.
Incorporate
Problems that are likely to happen when you are taking part in a particular activity.
Pitfalls
A word used to describe goods that are likely to decay quite quickly, such as fruit or fish.
Pershable
A person who deals with the winding up of a company. His or her job is to make sure that the company's creditors are paid.
Liquidator
Something that you take to prevent something dangerous or problematic from happening in the future.
Precaution
Clearly and unmistakably stated. In a contractual situation, it usually means written as opposed to spoken.
Expressly
What is a retention of title clause?
It is a clause in a contract that allows the seller to retain ownership of goods until the are paid for
What additional right does a retention of title clause often give the seller of goods to assist him or her in recovering any unpaid goods that are on the buyer's premises?
The seller also has the right to enter onto the buyer's remises to recover the goods
If a buyer has not paid for goods what co the briefing notes say is often the reason for it?
If a buyer has not paid for goods it is often because the buyer's business is insolvent
What is the pitfall of including a retention of title clause in a contract if you are the seller of perishable goods?
The goods might go off
Does statute assist a seller who has not included a retention of title clause in a contract for the sale of goods?
No, statute does not assist a seller who has not included a ROT clause in his or her contract for the sale of goods
If a seller wrote a retention of title clause on an invoice how would a court describe the clause?
The court would describe this information as a postcontractual term
How do the briefing notes suggest that a seller makes his or her goods easily identifiable?
The briefing notes suggests that a seller puts a serial number on his or her goods
The briefing notes suggest that if any goods are not paid for then the seller should get those goods back very quickly. What is the reason for this?
The buyer might say that the goods have been mixed with another product to create a new item that cannot be returned
To … a risk
Carry
To … goods
Recover
… stated
Clearly
To … … insurance
Take out
A … precaution
Sensible
To … … someone's premises
Enter onto
To … title in goods
Retain
To … a precaution
Take
To pay … goods
For
To incorporate a clause … a contract
Into
To pay …/… instalments
In/by
To mix one product … another
With
To protect …non-payment
Against
Property … the Goods shall not pass … the Buyer … payment is made by the Buyer to the Company … the agreed price.
in
to
until
of
Property in the Goods remains … the Company … all times in the case of a hire agreement and until payment is made … full in the case of sale … the Goods
with
at
The Company guarantees that it has the authority to transfer title and that title … the Goods when transferred to the Buyer is lawful. The Goods are free … any security except as otherwise agreed … the parties … writing.
from
by
… delivery and the passing of risk in the Goods or any other … of this agreement … to the Goods shall not pass to the Buyer until the Seller has received the full … of the Goods and all other goods sold or agreed to be sold by the Seller to the Buyer for which payment is …
notwithstanding
provision
title
price
due
The Designer acknowledges that copyright and any other rights of any nature that may currently exist or be created in the future in respect of any aspect of the Website and any associated material in connection with which the Designer is providing her services shall belong absolutely to the Company.
This is the IP clause.
Where the Designer is approaching third parties for contributions or assistance in respect of the Website then the information to be divulged shall be kept to a minimum and a representative of the Company shall attend all such meetings with the Designer.
This is the non-disclosure clause.
Lydia Barlow works … a self-employed graphic designer here in Chatsworth. Her speciality is the design of marketing material for new companies. Niall King has just started a new business. Niall's business is a travel company aimed … people aged 21 to 25 who wish to travel in the free time they have between finishing university and starting work. The name of Niall's business is Pure Adventure Travel Ltd.
Niall meets Lydia to plan a brochure to advertise his travel company. He wants her to design a colour brochure … 40 pages. He tells Lydia that his budget for the design is £12,000. They sign a contract for services. Niall provided the contract. A month later Lydia provides Niall with the brochure and an invoice … £12,000. Niall is delighted and pays Lydia the £12,000 immediately.
Six months later, Niall puts some of the text and pictures from the brochure … his website. Lydia sees the website and contacts Niall. She says that she did not give permission for her work to be used in this way and she requires additional payment. Now the two parties … the agreement are … dispute. How could this dispute have been avoided?
If you are the buyer of work that is creative in nature you need to make sure that you have the right to use any intellectual property connected with the work. There are two ways to do this.
make sure that the supplier transfers ownership … the intellectual property to you at the time of payment. This is often called an assignment of rights
if there is no assignment, make sure that the supplier gives you permission to use the intellectual property. This is usually known as a licence. When you have a licence to use something you are known as the licensee.
What is the difference … an assignment of IP rights and a licence to use the intellectual property? The assignment of IP rights means the absolute transfer of those rights in return for payment. The owner of the IP rights usually has to guarantee to the buyer, known as the assignee, that the rights are sold free of any encumbrance. An encumbrance is a third party interest in the rights and might mean that the rights do not belong solely to the seller. The right to start legal proceedings for infringement of intellectual property rights belongs to the assignee.
Licensing can be more advantageous to the supplier. He or she continues to own the intellectual property but makes money … allowing others to use it, subject to certain restrictions. A good checklist when granting a licence is:
Is the licence limited to a particular territory?
Is the licence exclusive or non-exclusive?
How long will the licence last?
How much and when does the licensee have to pay?
What other restrictions are there on the use of the material?
The best option in the case above would have been for Niall to have included a clause in his contract with Lydia under which she assigned all of the intellectual property rights in the design work to him to use in any way that he wished.
as
for
onto
between
To … a service
Provide
A … organisation
Rival
To be … from any encumbrance
Free
To … ownership
Transfer
To be contracted … someone to do something
By
… the hands … a rival organisation
To have copyright/IP rights … something
In
… the time of payment
At
What is the name of the process by which a supplier such as Lydia transfers ownership of IP rights to the buyer at the time of payment?
An assignment of rights.
What is a licensee?
A person who has permission to use intellectual property, even though he or she is not the owner.
Can an assignee sue for infringement of IP rights?
Yes
The Supplier agrees that she shall not … to any … party any confidential information … acquired during the existence of this Agreement including, but not … to:
the current or future business plans of the Company
data
marketing strategies
financial information
from the date of this Agreement and for a period of one year following its …
disclose
third
whatsoever
limited
expiration
The Designer … that the Illustrations provided under this contract are original and have not been … to any other party and are not in the public domain.
Warranty
warrants
disclosed
The Designer hereby …the Publisher against any loss, injury, or damage arising from any breach by the Designer of any undertakings in this Agreement, howsoever …
Indemnity
indemnifies
caused
An … term
Implied
To … a warranty
Imply
To … information
Disclose
To … a loss
Suffer
An … stated contract term
To be … a certain standard
Of
Loss arising … a breach
From
A warranty made … one party to the other party
To indemnify someone … loss or damage
Information about people who are not party to the contract but may take legal action.
Third party.
Information about illustrators who have lost a lot of money.
Ruinous financial experiences
Information about who is the owner of the intellectual property in the illustrations.
Who owes the copyright
Information about making changes to clauses contained in contracts.
Amend
Information about giving someone permission to use your illustrations without giving that person ownership of the illustrations.
Grant a licence
Information about what is libellous.
Defamatory
Information about transferring ownership of copyright completely to the commissioner.
Assignment
Information about certain guarantees that an illustrator may be required to give to the commissioner.
Warranties
Information about the promise an illustrator may be required to make regarding any financial loss the commissioner suffers as a result of a breach of contract.
The Illustrator … to the Commissioner that the Illustrations provided are original and have not been … to any third party except to the Commissioner and its advisers and employees. The Illustrator … warrants that she has full rights in the Illustrations and that the Illustrations have not been previously … or licensed in any form in any part of the world and are not now or ever have been in the public …
further
assigned
domain
The Illustrator agrees to indemnify and keep … the Commissioner (and any other … that the Commissioner shall in the normal operation of its business agree to indemnify) against loss, … or damage, including legal … in consequence of any breach of the warranties given herein or arising out of any claim regarding an … of breach of copyright or defamation.
indemnified
party
injury
costs
allegation
The Author hereby warrants that the Book is the Author's original work, has not been published before, and is not currently … consideration for publication elsewhere. Further, that the Book contains no libellous or unlawful statements and that it … no way infringes the rights … to others, and that the Author, … the owner of the copyright, is entitled … make this assignment.
under
The Author hereby agrees to indemnify the Publisher … any loss or damage resulting … any breach by the Author … any warranty, undertaking or term in this Agreement and against any legal costs or damages incurred … Publisher … a result of any breach by the Author under this Agreement.
against
'It is absolutely essential to include a termination clause in a contract. There are several reasons for this.
The first reason is a very simple one. Let's imagine that you … such as a shop that sells luxury chocolate, in the centre of London. You … into a contract with a supplier of chocolate in Belgium. The contract … that the supplier in Belgium will deliver a certain quantity of goods to you every month. Both parties expect the contract to continue for a certain period of time before it has to be renegotiated and they … agree upon the term of the contract as 12 months. What will you do if no one buys your chocolate and after three months your business is in trouble? You do not want to be obliged to go on with the contract for another nine months! Therefore, when you … the terms and conditions of the contract it is essential to say that either party can terminate by … notice to the other. A reasonable notice period in a situation such as this is probably four weeks.'
run
enter
states
agree
negotiate
giving
How does a court refer to a very serious or significant breach of contract?
A material breach
What is a minor breach?
A less serious kind of breach
What right does a minor breach normally give rise to for the injured party?
Claim for damages
What is the correct legal name for the solution that the party in breach gives when he or she solves the problem caused by the breach?
A remedy
In order to be described as a material breach, what must the breach do with reference to the contract?
A threat to the purpose of the contract
Finally, the third reason for including a termination clause in any commercial contract is the possibility that the other party may have financial troubles. Most contracts these days state … the termination clause that if one party stops trading … a business or even threatens to stop trading, then it will bring the contract … an end. This is … the protection of the other party. Other particular circumstances that are usually listed in a termination clause are one party being the subject … dissolution, winding up, receivership or any other insolvency proceedings. All of these circumstances can bring a contract to a very sudden end."
The … of a contract
Term
A … breach
Material
To … notice
Give
The … date of a contract
Expiry
Minor
To … …/… …liquidation
Enter into/go into
To … a breach
Commit
Remedy
The circumstances …/…which something can happen
Under/in
To be … breach … your obligations
To insist …/… something
Upon/on
To give rise … something
To
Things that a company owns that have a value.
Assets
Receiving.
Receipt of
A phrase that means 'not having any effect upon something at a later date'
Without prejudice
To stop doing a particular activity for a period of time with the intention that you might or might not start the activity again later on.
Suspend
A solution for a breach of contract.
Stops.
Ceases
Despite, in spite of.
Notwithstanding
Owed.
Due
A phrase that means 'being the object of something.'
Subjects to
The people or organisations to which a person owes money.
Creditors
Natural disasters/Acts of God
earthquake
flood
epidemic
drought
avalanche
Problems caused by modern technology
mechanical failure
communications failure
electronic failure
Problems caused by human activity
rebellion
war
riot
civil unrest
acts of terrorism
sabotage
hijacking
strike
civil war
criminal acts
arson
No party shall be liable … any failure to perform its obligations … this Agreement in the event that such failure results … flood, earthquake or any Act … God, riot, civil unrest, war or any other cause beyond a party's reasonable control, including electronic or communications failure but excluding failure due … any breach of duty of care or a party's financial condition.
In the event that this Agreement or any part of it can not be performed for any reason beyond the reasonable … of the Company or the Supplier including but not … to such events as Acts of God, war, strikes or civil disturbances, then such non-… shall not be deemed a breach of this Agreement. In the event that the obligations under this Agreement cannot be fulfilled for any reason beyond the control of the defaulting party for a continuous period of three months then the other party is entitled to … this Agreement at the end of that three-month period by giving … in writing
control
performance
terminate
notice
An … event
Unforeseen
To … … a clause
Rely on
To … a principle
Establish
To be … someone's influence
Outside
To go … of business
Out
The Seller warrants that the property is sold … of any encumbrance.
Contracts contain what are known as express terms that are clearly stated in the agreement but they may also have … terms, which a court will presume to exist even if they are not stated.
It is possible for one of the parties to a contract to terminate on the grounds of breach but it must be a … breach and not a minor breach or an inconvenience.
You are notified that you are in breach of contract and you have 14 days to remedy … the breach. If you fail to do so we will terminate our contract with you without further notice.
The Seller will ... title to the goods until the full price of the goods has been received by the Seller
The service that you … to us under this agreement was not satisfactory.
Provided
This is confidential information and you must not … it to any third party.
It is always a good idea to … … insurance in case a claim is made against you under an indemnity clause. If you had to find the money from your own pocket it could ruin you financially.
The … of this contract is defined as two years.
We intend to … upon the force majeure clause of this contract and we deny that we are in breach of our obligations.
Rely
A … of title clause often gives the seller the right to enter onto the buyer's premises to recover goods that have not been paid for.
Retention
To … goods or intellectual property rights to someone is to transfer ownership to that person completely.
Assign
The Author … that the Article is her own original work and that no third party has any right in the Article whatsoever.
Warrants
An Intellectual Property … is a service that many law firms offer to their clients. The law firm will check to see what valuable intellectual property a business has and give advice on how to protect it.
Audit
If you have … in goods it means that you are the owner of those goods.
Property
An 'all … 'provision in a contract of sale protects the seller. It means that ownership of the goods does not pass to the buyer until the buyer has paid everything that he or she owes under the contract.
Monies
In the USA an indemnity clause is often referred to as an … clause
Indemnification
If there is a warranty in a contract that you do not want to agree to, you can ask the other party to … it out of the contract.
Strike
A … clause in a contract states the circumstances in which a contract can be ended before the agreed expiry date.
Termination
A … majeure clause in a contract deals with the circumstances in which the parties may be excused performance of their obligations due to some unforeseen event such as a fire or a flood.
Force
The designer sent an invoice … £2000 to the company that had commissioned her work.
When you are paying for design work you should always make sure that the designer transfers the intellectual property rights in the work to you … the time of payment.
The Author hereby agrees to indemnify the Company … any loss or damage arising from any breach of the terms and conditions of this Agreement.
A force majeure clause deals with events that are … The control of the contracting parties.
Beyond/outside
Who is your new travel business aimed … ? Is it only for people under the age of 30?
Please pay … the goods that you have received by 3 July.
I have been commissioned … a fashion magazine to take some photographs for their next edition.
Were the goods that you received last week … the standard that you expected?
The author warrants that the article … no way infringes the intellectual property rights of any third party.
If one party to a contract stops trading … a business, then the other party can usually terminate the contract immediately.
As
The Licensee agrees … indemnify the Proprietor and shall be liable … all losses, costs and expenses, including but not limited … legal fees … a full indemnity basis, arising … any breach … the Licensee of any of the warranties or agreements mace hereunder.
on
The property in the Seller's Products shall remain solely and absolutely with the Seller until such time as the Buyer pays the full purchase price for all Products which the Buyer has contracted to purchase from the Seller. The Scller may, for the purpose of recovery of its Products enter onto any premises where the Products are stored and may repossess the Products.
The Seller warrants that title to the Products when transferred to the Seller is valid and that the Products are transferred free of any security interest or encumbrance except as agreed between the parties in writing.
property in -> legal ownership of
solely -> only/exclusively
recovery -> getting back, taking possession of
stored -> kept in a particular place for a period of time
warrants -> guarantees, promises
encumbrance -> a third party interest
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