Term
| The PPSA and the importance of consent |
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Definition
| The PPSA only applies to consensual agreements. |
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Term
| PPSA, Section 9: Effectiveness |
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Definition
| Subject to this Act and any other Act, a security agreement is effective according to its terms. |
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Term
| PPSA, Section 10: Enforceability |
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Definition
| Description of goods is very important, and if description isn't detailed enough it may not be considered enforceable. A secured creditor is deemed not to have taken possession of a good if the good is in the apparent possession or control of the debtor or the debtors agent. A description of collateral as inventory is adequate for the purposes of the PPSA so long as it is held by the debtor as inventory. |
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Term
| PPSA, Section 11: Copy of Agreement |
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Definition
| Where a security interest is in writing, the secured party shall deliver a copy to the debtor no later than 10 days after its execution, and if the secured party fails to do so after a request by the debtor the court may, upon application of the debtor, make an order for the deliver of a copy to the debtor. |
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Term
| PPSA, Section 12: Attachment |
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Definition
| A security interest, including a security interest in the form of a floating charge, attaches when: value is given, the debtor has rights in the collateral or power to transfer the rights to the creditor, and when the security interest becomes enforceable according to section 10. A debtor has rights to goods leased or consigned to the debtor when they take possession of them in accordance with the lease or consignment. |
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Term
| What is needed to create a security interest? |
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Definition
| A security interest requires a written contract, a description of the collateral (not specific, but specific enough to identify the collateral), and it must be secured (registered). |
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Term
| PPSA, Section 10(1)(d)(iv) |
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Definition
| A security interest is enforceable against a third party only where the debtor has signed a security agreement that contains a statement that a security interest is taken in all of the debtor’s present and after-acquired personal property except specified items or kinds of personal property or except personal property described as “goods”, “chattel paper”, “investment property”, “documents of title”, “instruments”, “money” or "intangibles". |
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Term
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Definition
| Security interest attaches when value is given and the debtor has rights in the collateral or the power to transfer rights. Value must be real; not a cheque that bounced. |
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Term
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Definition
| The debtors rights in goods leased or consigned to the debtor exist when the debtor assumes possession; the security interest held by the creditor secures the debtors obligation to pay for the financial asset. Possession is an act that makes it clear the debtor may possess/use the good. |
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Term
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Definition
| Describes rights in animals, crops, minerals, and trees. No rights in crops until they begin to grow (are put into the ground). No rights in animals until they are conceived, that is, until the mother becomes pregnant. No rights in minerals until they are extracted. No rights in trees other than crops until they are severed. |
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Term
| Difference between a security agreement and a security interest |
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Definition
| A security interest is an interest securing a payment or performance, where as a security agreement is an agreement that creates a security interest or evidence in writing of such an agreement. Agreement must be made by those with the proper authority to enter into such an agreement or it can be held void, as was the case in Atlas Industries v. Federal Business Development Bank, where Atlas tried to argue that a purchase order was intended to be a security agreement. |
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