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Chattel Security Agreement for Canada

Chattel Security Agreement Template for Canada

A Chattel Security Agreement is a legal document used in Canadian jurisdictions to create and evidence a security interest in personal property (chattels) given by a debtor to a secured party. The agreement is governed by the Personal Property Security Act (PPSA) of the relevant province and creates enforceable rights in the secured property. It includes detailed descriptions of the collateral, the obligations being secured, representations and warranties, and the rights and remedies of the parties upon default. The document must comply with provincial PPSA requirements for creation and perfection of security interests, while also addressing federal legislation where applicable.

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What is a Chattel Security Agreement?

A Chattel Security Agreement is essential in secured lending transactions where personal property is offered as collateral. This document is commonly used in Canadian jurisdictions when a creditor requires security over movable assets or other personal property owned by a debtor. The agreement must comply with the requirements of the applicable provincial Personal Property Security Act (PPSA) and related federal legislation. It includes crucial details about the secured obligations, description of collateral, maintenance requirements, default provisions, and enforcement mechanisms. The agreement is typically used in commercial lending, equipment financing, inventory financing, and other secured transactions where the lender needs to establish a valid and enforceable security interest in the debtor's personal property.

What sections should be included in a Chattel Security Agreement?

1. Parties: Identification of the secured party and the debtor, including full legal names and addresses

2. Background: Context of the security agreement, including reference to any underlying obligations or credit agreements

3. Definitions: Definitions of key terms used throughout the agreement, including specific PPSA terminology

4. Grant of Security Interest: Express grant of security interest in the collateral by the debtor to the secured party

5. Description of Collateral: Detailed description of the collateral subject to the security interest, meeting PPSA requirements for specificity

6. Obligations Secured: Description of the obligations being secured, including principal amounts, interest, and other charges

7. Representations and Warranties: Debtor's representations regarding ownership, condition, and status of collateral

8. Covenants: Ongoing obligations of the debtor regarding maintenance, insurance, and use of collateral

9. Default and Remedies: Events of default and secured party's rights and remedies upon default

10. Perfection Provisions: Requirements and authorizations for registration and perfection of the security interest

11. General Provisions: Standard contract clauses including governing law, notices, and amendments

What sections are optional to include in a Chattel Security Agreement?

1. Third Party Rights: Required when there are other parties with interests in the collateral or guarantors involved

2. Special Collateral Provisions: Used when dealing with specific types of collateral like serial numbered goods or investment property

3. Purchase Money Security Interest: Include when the security interest qualifies as a PMSI under the PPSA

4. Cross-Default Provisions: Used when multiple agreements or obligations are interconnected

5. Consumer Protection Provisions: Required when the agreement involves consumer goods or a consumer transaction

6. Insurance Requirements: Detailed insurance provisions when collateral requires specific insurance coverage

7. Priority Agreements: Include when there are multiple secured parties requiring priority arrangements

What schedules should be included in a Chattel Security Agreement?

1. Schedule A - Collateral Description: Detailed itemization and description of all collateral covered by the agreement

2. Schedule B - Permitted Locations: List of locations where the collateral may be kept or used

3. Schedule C - Serial Numbered Goods: Specific identification of serial numbered goods including make, model, and serial numbers

4. Schedule D - Payment Terms: Detailed payment schedule and terms if not contained in a separate credit agreement

5. Schedule E - Prior Security Interests: List of any existing security interests or encumbrances on the collateral

6. Appendix 1 - Forms: Standard forms for notices, registrations, or other required documentation

7. Appendix 2 - Insurance Requirements: Detailed insurance specifications and requirements for different types of collateral

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Genie AI

Document Type

Security Agreement

Cost

Free to use
Relevant legal definitions








































Clauses






























Relevant Industries

Financial Services

Banking

Equipment Leasing

Manufacturing

Retail

Agriculture

Transportation

Construction

Technology

Healthcare

Energy

Mining

Commercial Real Estate

Automotive

Relevant Teams

Legal

Finance

Risk Management

Credit

Compliance

Treasury

Commercial Banking

Collections

Operations

Documentation

Security Administration

Relevant Roles

Chief Financial Officer

Finance Director

Credit Manager

Risk Manager

Commercial Lending Officer

Legal Counsel

Corporate Lawyer

Compliance Officer

Treasury Manager

Asset Manager

Collections Manager

Loan Officer

Security Registration Specialist

Credit Analyst

Commercial Banking Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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