You will see sentences divided into three sections. One of the sections contains a mistake.
You must identify the section of each sentence which contains the mistake.
TA S6 TA S11
When drafting a sales contract in which goods are traded on credit, a seller may include a ROT clause to protect its financial interests. Typically, such clauses enable the seller to retain the title of the goods or equipment until the items have been paid for in full or - in the case of an 'all monies' clause - until the buyer has paid all invoices owed to the seller.
When drafting a sales contract in which goods are traded on credit, a seller may include a ROT clause to protect its financial interests.
Typically, such clauses enable the seller to retain the title of the goods or equipment until the items have been paid for in full or
- in the case of an 'all monies' clause - until the buyer has paid all invoices owed to the seller.
(1 p.)
Should the buyer lack the funds to pay the seller in accordance to the purchase agreement, the ROT allows the seller to seize the goods and resell them for its own benefit.
Should the buyer lack the funds to pay the seller in accordance to
the purchase agreement, the ROT allows
the seller to seize the goods and resell them for its own benefit.
(1 p.)
Such clauses give sellers greater confidence when extending credit to buyers because they have a legal basis to take the goods back if, for example, the buyer becomes insolvent and has to file in bankruptcy.
Such clauses give sellers greater confidence when extending credit to buyers
because they have a legal basis to take the goods back if, for example,
the buyer becomes insolvent and has to file in bankruptcy.
(1 p.)
As long as the ROT clause is considered valid by the court with jurisdiction over the transaction, the seller is in a stronger position than another creditors, who will have to split whatever assets are available in the buyer's bankruptcy estate.
As long as the ROT clause is considered valid by the court with jurisdiction over the transaction,
the seller is in a stronger position than another creditors,
who will have to split whatever assets are available in the buyer's bankruptcy estate.
(1 p.)
While the basic intent of a ROT clause - that the seller retention the title until payment is complete - is fairly clear,;in practice enforcing these stipulations can become tricky. For example, certain raw materials that a manufacturer purchases on credit from the supplier;may be mixed with other materials, in which case the original item is no longer salvageable.
While the basic intent of a ROT clause - that the seller retention the title until payment is complete - is fairly clear,
in practice enforcing these stipulations can become tricky. For example, certain raw materials that a manufacturer purchases on credit from the supplier
may be mixed with other materials, in which case the original item is no longer salvageable.
(1 p.)
An illustration of that would be a commercial bakery that purchases sugar as an ingredient for it’s products. There’s no way for the seller to reclaim that sugar once it has been combined with other ingredients.
An illustration of that would be a commercial bakery that purchases sugar as an ingredient
for it’s products. There’s no way for the seller to reclaim that sugar
once it has been combined with other ingredients.
(1 p.)
Difficulties can also arise when the purchaser resells the items before it paid the supplier. This can happen when a retailer sells apparel that it acquired on credit, for instance. In this case, the seller’s ability to reclaim the products are greatly diminished, if not eliminated because the goods have changed hands through a legal transaction.
Difficulties can also arise when the purchaser resells the items before it paid the supplier. This can happen when a retailer sells
apparel that it acquired on credit, for instance. In this case, the seller’s ability to reclaim the products are greatly diminished,
if not eliminated because the goods have changed hands through a legal transaction.
(1 p.)