English Commercial Law - boilerplate clauses (Insolvency)
This is a typical clause pertaining to how the contract will work. It outlines what will happen if one of the parties experiences insolvency. Given that retention of title clauses are frequently employed when the buyer is about to go insolvent, this clause is frequently associated with the retention of title clause in a sale of goods agreement. It will typically result in immediate payment obligations and historically has permitted termination. However, as of June 2020, suppliers cannot depend on clauses allowing for termination in the event that a corporate client becomes insolvent or initiates an insolvency process due to the Corporate Insolvency and Governance Act 2020. Clauses allowing for contract termination in the event of an insolvency procedure involving one of the parties shall be void.
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