PPSA clause: sample wording for Australian contracts

Sample clause

Written for loan to Kerfwell Joinery Pty Ltd, a fictional joinery business, secured over its plant and equipment.

Personal Property Securities. (a) Security interest. The Borrower grants the Lender a security interest in all present and after acquired plant and equipment of the Borrower, and their proceeds, to secure the amounts owing under this agreement. (b) Registration. The Borrower consents to the Lender registering a financing statement on the Personal Property Securities Register and will promptly sign any document the Lender reasonably needs to perfect the security interest. (c) Contracting out. To the extent the PPSA allows, sections 95, 118, 121(4), 125, 130, 132(3)(d), 132(4), 142 and 143 do not apply, and the Borrower waives its right to receive a verification statement. (d) Change of details. The Borrower will give the Lender 14 days' notice before changing its name or ABN.

Sample wording, not legal advice.

Variants

What to negotiate

• Register on time

  Priority under the PPSA generally goes to the first to register. A purchase money security interest gets super priority only if it is registered on time: before the grantor takes possession for inventory, and within 15 business days for other goods. A supplier that registers late can lose to the grantor's bank.

• Only contract out of what you can

  Section 115 lets the parties agree that some enforcement provisions do not apply, where the collateral is not used mainly for personal, domestic or household purposes. Listing the sections, as the sample does, is the usual practice. A grantor should read the list, because it gives up notices it would otherwise receive before the secured party sells the goods.

• Searches are cheap insurance

  A PPSR search by serial number, such as a vehicle identification number, costs a few dollars and shows whether anyone has registered an interest. A buyer of second hand goods who skips the search can lose the goods to the seller's financier. The clause should say who searches, when, and what happens if a registration appears.

The risk of leaving it out

Without a PPSA clause, a secured party may have no clear consent to register, a late registration that loses priority, and an unperfected interest that vests in the grantor if it becomes insolvent. A buyer without a search clause can pay full price for goods still under finance and then lose them to the lender, with only a claim against a seller who may not be found.

What the PPSA treats as a security interest

The Personal Property Securities Act 2009 looks at substance, not form. A loan secured over equipment, a retention of title supply, a commercial consignment and leases of goods for more than a year are all security interests. An interest is perfected by registration on the Personal Property Securities Register, or in some cases possession or control. If the grantor becomes insolvent, an unperfected security interest generally vests in the grantor, so the secured party loses its claim to the goods. Law checked on 21 October 2026. This page explains how the law works and is not legal advice.

Searching before you buy

The PPSR can be searched by serial number for motor vehicles, boats, aircraft and some other goods, or by the grantor's details for other property. A clean search on the day of payment, with the certificate number recorded in the contract, is the buyer's best evidence. The vehicle sale and bill of sale examples both record a search and a warranty, because a private buyer who does not search takes the risk of finance owed on the goods.

Lists of sections and why they appear

PPSA clauses often carry a list of section numbers the parties contract out of, such as sections 95, 118, 121(4), 125, 130, 132(3)(d), 132(4), 142 and 143. These deal with notices before enforcement, the order of dealing with collateral and the grantor's rights to redeem or reinstate. Contracting out simplifies enforcement for the secured party. Section 115 sets which provisions can be excluded and only where the collateral is not mainly used for personal, domestic or household purposes.

Where the clause sits in a generated document

Loan agreements, equipment and vehicle sales, supply terms and consignment agreements carry this clause. When asking the AI document generator for one, say which side the business is on, the goods covered, whether to contract out, and for a sale, who searches the register and when.

Documents that carry this clause

Loan agreement templateA Tasmanian foundry is borrowing $180,000 from a private investment company to buy a used induction furnace. The lender is not a bank, so everything a bank would take for granted has to be written down: what has to happen before the money moves, what is registered over what, and how long the borrower gets to fix a default.Vehicle sale agreement templateA dual cab ute is changing hands between two people on the Central Coast for $28,500. No dealer, so no statutory warranty and no guarantee of clear title. What the buyer gets instead is five written warranties, a register certificate number, and a mechanic's report obtained before the balance moves.Bill of sale templateA coffee roaster is selling four pieces of used cafe equipment to a cafe down the road for $34,100. The interesting part is not the price. It is that the buyer searched the register against the serial numbers three days earlier, and the search date is written into the warranty.Caravan sale agreement with the compliance plates recordedA caravan is a trailer, a gas installation and a 240 volt circuit in one object, and each of those carries its own paperwork. This agreement records all three, puts the safety certificate where the law puts it, on the seller, and gives the buyer a window to have a gas fitter and an electrician look before the balance moves.

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