Prior to 1976, this issue did not appear to raise serious difficulties.1 Under the Sale of Goods Act 1893, general contractors obtained good title prior to any delivery, subject of course to any contractual terms stating otherwise. Ownership would then pass to the client upon payment for the goods being received. Under this system therefore, a client/supplier dispute would result in judgment for the client.

This situation was complicated in 1976 however by the decision of Mocatta J., upheld by the Court of Appeal, in Aluminium Industrie Vaassen B.V. v. Romalpa Aluminium Ltd, 2 which concerned a dispute between a supplier and a buyer on the verge of insolvency. The reservation of title clause used was a rather pedestrian translation from the original Dutch, and the contract itself was in fact made expressly subject to Dutch law, although this point was not raised by counsel. As a result, neither the High Court nor the Court of Appeal received guidance as to the law of sale applicable in the Netherlands. If these concepts had been investigated, as they clearly and obviously should have been, the court would have discovered that under Dutch law, reservation of title clauses are ineffective notice to a buyer and the court cannot recognise a contractual right to assign book debts which do not exist—the equivalent in English law being present assignment of future chose in action. Unfortunately, the case was nonetheless decided on the basis that English law applied. The Court of Appeal opted not to apply the contra proferentem rule; they ignored the high probability that the clause was invalidated for uncertainty; they chose to make a viable contract by implying a power that the buyer could re-sell the goods on condition that they be accountable to the seller for the profits; they disregarded the inconsistency between this immediate duty to account for the proceeds of sale in the face of an express

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