Q&A - A company I supplied has gone into administration - can I recoup goods or payment?

Q: I regularly supply goods to one of my customers which is a limited company, and which has now gone into administration.  I have not been paid for the goods which I supplied.  Is there anything I can do to be paid or to get my goods returned?

A: In any insolvency process, the "unsecured" creditors (i.e. suppliers such as you, as opposed to the company's bank and other lenders) usually find that they only receive a proportion of what is owed to them.   You can attempt to recover any goods which remain in the company's possession, but this will depend on the terms of the contract between you and the company in administration.

If you supplied the goods subject to your standard terms and conditions and those terms include a properly drafted "retention of title" clause, it is possible for you to seek to retrieve your goods on the basis that the company has not paid for them. These types of clauses aim to provide that ownership of the goods does not pass to your customers unless and until all sums due and owing to you are paid. Such clauses are often the subject of disputes, however, and it is imperative that retention of title clauses are properly drafted as such provisions will only apply if you trade under properly drafted terms and conditions.

It is always advisable for any company that supplies goods to customers to have appropriately drafted standard terms and conditions of sale, and to ensure that these apply to their contracts. It is equally important to have such terms regularly reviewed by a solicitor to ensure that they remain valid and effective.

01/05/2013