Title Retention Clause Law and Legal Definition

A title retention clause allows a supplier of goods to retain ownership over the goods supplied until certain conditions are met. Generally, the condition will be to pay the purchase price. This clause provides the supplier a security against the buyer's default or insolvency. The clause is also known as a Romalpa clause, or reservation of title clause.

According to the clause, ownership of the goods does not pass to the buyer until payment is made. Such clauses are incorporated in contracts that deal with businesses that sell goods on credit.