... in Armour v Thyssen Edelstahlwerke AG1 and Aluminum Industrie Vaassen BV v Romalpa Aluminum Ltd.2 Relationship with the doctrine of equitable tracing Romalpa emphasised the importance of the doctrine of equitable tracing where retention of title clauses are concerned. Very often, buyers resell goods purchases to others. A retention of title clause has to operate in conjunction with the doctrine of equitable tracing to allow the original seller a proprietary right to the proceeds of the second sale. It was established here that this arrangement was conditional upon the original buyer's accounting for the proceeds of sale. This shows the potentially far reaching impact on commercial law of retention of title clauses.3 Reason for the lack of success of retention of title clauses (i) Unfairness to general creditors of the buyers The courts have been reluctant to enforce retention of title clauses because they operate in effect as a security interest which does not ...

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