Celtic brotherhood is placed to one side this weekend as Scotland take on Ireland in Dublin in the final round of this year's Six Nations Championship. On current form, it looks like Ireland will just about manage to retain their title as champions from last year, despite last Saturday's disappointing display against England. Scotland are just playing for pride now, with the big question being whether they can bounce back against the most consistent team in world rugby to stop them retaining the Six Nations title.

In a desperate attempt to segue this upcoming battle into a topical legal point, we take a look at the similarities and differences between the two jurisdictions in relation to retention of title clauses and their operation upon insolvency.

Retention of title (ROT) clauses are contractual agreements that allow a seller to retain legal ownership of goods until certain specified conditions are met. Such agreements override the general legal principle that title to goods will pass on delivery. Conditions are generally no more complicated than requiring payment in full, albeit parties are free to agree their own conditions as to when title will pass.

The position in Scotland

In Scotland, the genesis for ROT clauses is a product of contractual freedom and common law principles. The UK Sale of Goods Act 1979 ensures that such clauses are enforceable, provided they are clearly stipulated and agreed upon by the parties to a contract.

When a buyer becomes insolvent, an ROT clause can offer a seller a degree of protection, enabling them to retain ownership of the goods if the ROT clause is valid and the required conditions to facilitate transfer have not been fulfilled.

However, any appointed administrator or liquidator will scrutinise the ROT clause as creditors are not always able to demonstrate that:

• the ROT clause was part of the contract at the time of the transaction and has not been superseded by any further agreement through any battle of the forms or custom and practice;
• the goods supplied remain identifiable and have not been paid for in full or otherwise incorporated into another product, resold or consumed; and
• the clause is not rendered ineffective by other statutory rights or prior claims.

There is accordingly a long way between inserting an ROT clause and actually being able to enforce and rely on such clause upon insolvency (a bit like Finn Russell, better to have one in a team/contract of supply and not need it that the other way around).

Under Scots law, there is also a final complication that an ROT clause is only effective in relation to a contract for goods and will not be operative under one for both goods and services – hence the proclivity to separate out such contracts when doing business north of the wall.

Position in Ireland

Just as the Irish rugby team hopes to defend their title on Saturday evening, the ROT clause under Irish law defends sellers against the uncertainty of insolvency.

In Ireland, the law regarding ROT clauses is primarily governed by the Sale of Goods Acts 1893 and 1980. These provide that the passing of title in goods is determined by the intentions of the parties, as expressed in their contract. The principle of freedom of contract allows the parties to agree terms to suit their specific circumstances. Importantly, in an insolvency context, the inclusion of an ROT clause allows a seller to reclaim their goods where the conditions of the clause have not been met.

But beware the "interception" risk! A poorly drafted clause could be like a wayward pass intercepted by James "J-Lo" Lowe, resulting in penalties and turnovers that no seller wants to face. As in Scotland, a liquidator or receiver will closely examine the ROT clause (much like a TMO) and determine its validity. Where a clause is found to be invalid, the liquidator/receiver can sell the goods and the seller will become an unsecured creditor.

Similar to the position in Scotland, in order for an ROT clause to be effective under Irish law, the ROT clause must be clearly incorporated into the standard terms of trade, and the goods must be easily and clearly identifiable. However, as distinct from Scots law, in Ireland there is no restriction on the inclusion of an ROT clause in a contract for both goods and services. As a result, an ROT clause can, and should be, inserted into any contract which includes the sale of goods.

Possession is crucial

So, whether you are cheering on your team with a pint of Guinness or Tennent's in hand, or navigating the complexities of an insolvent company, remember this: in both rugby and law, possession is crucial! A strong ROT clause in place allows sellers to hold on to their title, much like Andy Farrell's men will be hoping to do this Saturday.