Romalpa Clause Law and Legal Definition

Romalpa clause is a provision in a contract for sale of goods. Under this type of clause, a seller can retain ownership of goods until they are paid for. However, a buyer is allowed to take delivery of goods. If the buyer fails to pay, the seller can take possession of the goods. In other words, Romalpa clause provides that title to the goods remains vested in the seller till some obligations are fulfilled by the buyer. For example, a seller can repossess the goods if a buyer becomes bankrupt and unable to pay for the goods supplied on credit. Romalpa clause is also known as retention of title clause or reservation of title clause. These clauses are most prevalent in Europe and less common in North America.