Security interest
An interest in personal property that secures payment or performance of an obligation.
Under the PPSA the label on the agreement does not matter; substance does. A retention-of-title clause, a hire of goods for more than two years, a consignment and a charge over assets are all security interests. Some arrangements are 'deemed' security interests even when nothing is owed, including PPS leases and commercial consignments.
Related terms
- Retention of title (ROT) — A clause in supply terms that keeps ownership of goods with the supplier until the customer pays.
- PPS lease — A lease or bailment of goods for more than two years, or for an indefinite term, by a lessor regularly engaged in leasing.
- Secured party — The person who holds the security interest: the supplier, lessor, lender or consignor.
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