Draft a retention of title clause that extends to mixed goods, processed products and traceable proceeds of sale.
Law & Contract Management
Retention of Title, Set-Off and Termination Rights When a Counterparty Becomes Insolvent
Protect commercial claims against an insolvent counterparty by drafting enforceable retention of title, set-off and termination clauses and acting correctly once insolvency proceedings begin.
🗓️Duration5 training days
📚Content4 modules · 8 sessions
🎓On completionAccredited attendance certificate
About the programme
Course Overview
When a customer or supplier enters administration or liquidation, the contract terms that matter are rarely the ones the parties discussed most during negotiation. They are the retention of title clause, the set-off provision and the termination trigger, each of which behaves differently once an insolvency practitioner is appointed and a moratorium takes effect. This course works through how to draft each of these protections so they survive contact with insolvency law rather than being defeated by it, starting with retention of title clauses that go beyond a simple reservation of ownership to address mixed goods, processed products and proceeds of sale. Participants examine set-off rights, including contractual set-off, insolvency set-off and the circumstances in which each applies, and learn why termination clauses triggered purely by insolvency, sometimes called ipso facto clauses, are increasingly restricted or unenforceable in some jurisdictions. The course also covers the practical sequence of actions once a counterparty enters formal insolvency: verifying the appointment, asserting retention of title claims to an administrator, exercising set-off before it is lost, and deciding whether to continue or terminate supply. Case studies use realistic supply chain insolvencies to test how well-drafted clauses actually perform when tested under pressure.
Expected Learning Outcomes
Distinguish contractual set-off from insolvency set-off and identify when each is available.
Assess the enforceability of termination clauses triggered solely by a counterparty's insolvency.
Verify an insolvency practitioner's appointment and understand the effect of a statutory moratorium.
Assert a retention of title claim promptly and correctly once administration or liquidation begins.
Exercise set-off rights before insolvency proceedings limit or extinguish them.
Decide whether to continue, suspend or terminate performance when a counterparty becomes insolvent.
Who Should Attend
In-house counsel managing credit risk and insolvency exposure in commercial contracts
Credit control and finance managers responsible for recovering amounts owed by insolvent customers
Supply chain and procurement managers assessing supplier insolvency risk
Restructuring and insolvency practitioners advising creditors on contractual recovery options
Contract managers drafting retention of title and termination clauses for trading terms
Risk managers monitoring counterparty financial distress across a supplier or customer portfolio
Course Modules
Select any module to see its sessions and points.
01Retention of Title: Drafting Clauses That Actually Protect Goods
2 sessions · 8 points
Session 1From Simple Reservation to All-Monies Retention of Title
- Draft a simple retention of title clause reserving ownership until payment for the specific goods supplied.
- Extend the clause to an all-monies basis covering all outstanding debts owed by the buyer.
- Address retention of title over goods that are mixed, processed or incorporated into a finished product.
- Draft tracing provisions that extend retention of title to identifiable proceeds of resale.
Session 2Making Retention of Title Effective in Practice
- Require the buyer to store retained goods separately and mark them as subject to retention of title.
- Reserve a right of entry to recover goods from the buyer's premises before or after insolvency.
- Address registration or filing requirements that may apply to security-like retention of title arrangements.
- Anticipate challenges from an insolvency practitioner disputing the validity or scope of the clause.
02Set-Off Rights Before and During Insolvency
2 sessions · 8 points
Session 1Contractual Set-Off in Ongoing Trading Relationships
- Draft a contractual set-off clause allowing mutual debts to be netted before payment is due.
- Distinguish set-off from a general lien and from a right of retention over goods or payments.
- Address set-off across group companies and multiple contracts with the same counterparty.
- Identify contract terms that inadvertently exclude or restrict a party's set-off rights.
Session 2Insolvency Set-Off and Its Limits
- Explain how mandatory insolvency set-off operates once liquidation or bankruptcy begins.
- Identify the cut-off date after which new mutual dealings can no longer be set off.
- Assess how a statutory moratorium in administration affects the timing of exercising set-off.
- Calculate net exposure correctly when both set-off and retention of title claims apply to the same relationship.
03Termination Rights and Ipso Facto Clauses
2 sessions · 8 points
Session 1Drafting Termination Triggers for Financial Distress
- Draft termination triggers based on payment default, credit rating downgrade and financial covenant breach.
- Assess the growing restrictions on ipso facto clauses that terminate purely on insolvency filing.
- Distinguish essential supply contracts, which may be protected from termination, from other commercial contracts.
- Draft suspension rights as a proportionate alternative to immediate termination on financial distress.
Session 2Deciding Whether to Continue or Terminate Supply
- Assess the commercial and legal risk of continuing to supply a counterparty in administration.
- Negotiate revised payment terms, guarantees or upfront payment as a condition of continued supply.
- Evaluate the risk of a preference or transaction-at-undervalue challenge to payments received before insolvency.
- Document the decision-making process to support directors against wrongful trading or similar claims.
04Acting Once Insolvency Proceedings Begin
2 sessions · 8 points
Session 1Immediate Steps on Notice of Insolvency
- Verify the type of insolvency proceeding and the identity and powers of the appointed practitioner.
- Notify the insolvency practitioner promptly of retention of title claims and supporting evidence.
- Identify and, where possible, physically secure goods subject to a retention of title claim.
- Calculate and assert available set-off before the opportunity to do so is lost or disputed.
Session 2Recovering Value and Managing Ongoing Risk
- Submit a proof of debt for any unsecured balance not recovered through retention of title or set-off.
- Negotiate with the insolvency practitioner over disputed retention of title or set-off claims.
- Review credit terms and contract templates across the portfolio in light of the insolvency outcome.
- Strengthen future contracts with clearer retention of title, set-off and termination drafting based on lessons learned.
What the participant receives
4 course modules
A structured syllabus
8 training sessions
across 5 days
32 detailed points
Applied, detailed content
Accredited attendance certificate
On completing the programme
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