It is because the buyer, having using the materials he bought from the seller to manufacture a new product or selling the stuff he bought from the seller or whatever, has property in the product and the proceeds. The essence of a security interest is apparently that the debtor retains the ultimate right to the goods, which implies that he therefore has title to the said goods. Therefore, products and proceeds retention of title clauses are charges created by the buyer as chargor in favour of the seller as chargee because the buyer dude now has a right which he can transfer to the creditor. It's very much unlike the simple and all-debts retention of title clauses where title is never transferred to the buyer, and so those clauses cannot be charges because the buyer has no property/title (what is the difference) in the goods and therefore no right to transfer to the buyer by virtue of a security interest.
Wait. Then again, how does title transfer to the buyer in the cases of a new product or proceeds?
Seriously, the only thing I can think of to say about products/proceeds retention of title clauses is that they are utterly absurd, because, like, what kind of retarded person would willingly sign a contract that contracts away his right/title/property in goods that HE produces, or proceeds that are a result of HIS labour? It makes absolutely no sense to me. Whilst Tehy was talking about this to Huiquan and I this morning I wanted to ask, "So what's in it for the buyer?" But uh, I dunno, it seemed almost as stupid a question as "is title and property the same thing?" so I kind of didn't.
But it does seem like there's nothing in it for the buyer. Meaning it's rather unfair. And senseless. The charge interpretation kind of makes sense though, because title is vested in the buyer/chargor which at least gives him something instead of leaving him with nothing if the retention of title clauses are to be construed strictly as such.
But I don't know how title becomes vested in the buyer in the proceeds/products situation.
I haven't read the Alloys case but Tehy said this morning that the Australian High Court came up with a Trust interpretation which was of course the first time I was hearing of such a thing, unsurprisingly albeit super alarmingly. My first thought was, "Huh? How come can anyhow declare trust one?" I don't remember much from Trusts and Equity, unfortunately, but isn't the duty of a trustee rather onerous? Apart from how an imposition of a trust is to the disadvantage of like, the person's creditors in favour of the beneficiary who will take the insolvent trustee's assets before everyone else, isn't there some duties that the trustee has to carry out which are supposed to be onerous? I vaguely remember some crap about how the courts should be slow to declare a trust if it's not the intention of the parties to do so because, you know, onerous duties and everything. Maybe it's the fiduciary relationship thing. But Tehy said that Foskett v McKeown has cast doubt on whether a fiduciary relationship strictly exists in a Trust situation, to which my first thought was, "But it's just one case."
Okay, I don't remember what it said - more like I never got round to reading it last semester - but really! It's just one case! And maybe the judges got it wrong!
The trust interpretation, though, is utterly incredible. I'd read the case but it's like, 44 pages long, OMG. I can't even read 17 pages of my own compiled notes without looking at some random stuff online every five minutes.
Since I'm already writing this entry, I'd like to tell everyone about the ridiculous situation I found myself gaping at at Mos Burger West Mall this afternoon. See, I drove to West Mall to mail some shit (I found myself standing in the damn queue for fifteen minutes, to post one freaking mail, because some chick in front of me was mailing ten zillion shit, like OMG if you have ten zillion shit to mail, have the decency to let the girl behind you with ONE article to weigh, who ended up buying a freaking ONE-DOLLAR STAMP, go first, fucker) and my mom said, Buy Mos back for lunch. So I went to Mos where only one counter was open and there was someone in line. So naturally I lined up behind her, right? This more-than-middle-aged Chinese woman. Who appeared to be analysing the freaking menu. And the cashier, this old Chinese woman, was actually explaining the freaking menu to her.
OH MY GOD ARE YOU BLOODY KIDDING ME? First I had to wait fifteen bloody minutes to buy a stupid one-dollar stamp, and now I have to wait ten million years to buy two burgers and two pieces of chicken? If you can't decide on what you want, HAVE THE DECENCY TO LET THE PEOPLE BEHIND YOU GO FIRST. Seriously.
Thankfully, before I exploded a la Peter Petrelli in Heroes, a staff called me over to the counter on my right where I placed my order. The woman was still analysing the menu. I sat down and waited for my food. The woman was still analysing the menu.
Two minutes later she left without buying anything.
Can you imagine the catastrophe that my exploding would have unleashed on the whole of Singapore if the counter next to me had not been opened?
I just cannot believe how utterly thick some people can be. Isn't it common courtesy and sense to let the people behind you place their orders first if you can't fucking decide on what you want, AFTER staring at the menu for ten million years as though it were a rocket science manual? Was she retarded? Could she not comprehend English? If she couldn't comprehend English, could she not process the fucking pictures of, you know, the food?
What was even more ridiculous was my attempting to reverse out of my parking lot at Basement 2 of the car park. I drove into a lot and I somehow forgot that my car was crooked, and so when I was trying to reverse out - in my head I thought, "Just reverse straight out" - I almost hit the wall. I almost hit the car next to me. I hope I didn't hit the car next to me.
Damn scary OMG.
Worse still, when I reached home there was this huge ladder and a 'construction in progress' sign in the middle of the road. Which would have been fine if there wasn't a car parked to the left, because what I found myself gaping at was this not-wide-enough space that, objectively, was wide enough for a car to pass - but I am not an experienced driver. I saw that and went, Oh, shit.
My first thought was, Reverse back.
My second thought was, Call my mom.
Whilst I was trying to decide what to do though, this man who was standing around gave me directions. And even then I almost hit the sign; he had to move it for me. I was SO close to the ladder that I could've hit it, but I didn't...
...until the front wheels got past it and the back right wheel proceeded to knock into it.
In the right side mirror I saw the poor man holding on to the ladder and struggling with it and I can only imagine the damage I would've done to my parents' car if it had fallen on the car, and the carnage that would have greeted me at home after breaking the wonderful news to my mom.
Damn scary, it was.
On the bright side, I parked without hitting the left side mirror against the column like I did the last time.
I am utterly tragic.