Factoring Companies Guidebook
Double R.O.T
Definition
Where both the supplier and our Client have Retention of Title clauses through to proceeds of sale and goods are identifiable, moveable and durable. This can be heightened where the supplier delivers direct to, or knows the end customers identity.
See also: - Direct Deliveries, Retention of Title
Concerns
In these circumstances the supplier can potentially go straight to the end customer to recover the goods or seek payment, thus removing the factors ability to recover the debt. In these circumstances we are at considerable risk.
Identification
Review the Terms and Conditions of Sale and Purchase of both the client and their suppliers and make enquiries to determine whether the supplier is either aware of or delivers directly to the Client's customer.
Treatment
A waiver should be obtained from the supplier initially. In the second instance we may also approach the Client for a suitable remedy to their Terms & Conditions of Sale or a reserve to the appropriate value should be recommended.
