In giving advice to our commercial clients we still come upon some clients who are supplying goods on credit under trading terms that contain a 'retention of title' clause, but who have not yet implemented a system of registering their security interest in the goods they supply on the Personal Property Securities Register (PPSR).
Since January 2012, a failure to register on the PPSR your interest in goods you supply pending payment of the purchase price can be fatal to your ability to recover the goods or the proceeds of sale of those goods in the event that your customer goes into administration or has a liquidator appointed.
To maximise your right to enforce the retention of title provisions in your trading terms, you must register the security interest that is created by your trading terms on the PPSR.
If you have not already done so you should:
- Have your terms and conditions of trade and your credit application reviewed to ensure that they give rise to a security interest in your favour over any goods you supply on credit;
- Register over each of your customers any security interest that arises out of your trading terms – there are strict time frames to be met to ensure that you maximise your priority in relation to the goods you have supplied
If you are unsure as to how effectively your organisation is dealing with the PPSA, contact one of our commercial advice lawyers who can review your documentation and provide training to your staff as needed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
