- 6.1 Security interests
- 6.2 Exclusion: set-off, combination of bank accounts and netting arrangements
- 6.3 Exclusion: quistclose and turnover trusts
- 6.4 Exclusion: general law and statutory liens
- 6.5 Exclusion: interests in personal property that arise by operation of the general law
- 6.6 Exclusion: pawnbrokers and assignments of contractual position (novations)
- 6.7 Summary of security interest transactions (1) - transactions regulated as security interests under the PPSA
- 6.8 Summary of security interest transactions (2) - transactions expressly excluded from regulation under the PPSA
- 6.9 Summary of security interest transactions (3) - transactions that fall outside the definition of security interest
- 6.10 Summary of security interest transactions (4) - transactions to which it is unclear whether the PPSA applies
Pawnbrokers: security interests granted to pawnbrokers in their ordinary course of business, which will typically be pledges of collateral where the pawnbroker takes possession of collateral and makes an advance against the collateral, are not security interests under the PPSA, provided the value of the collateral is $5,000 or less.
Assignments of contractual position (novations): more specifically, the transfer of an "unearned right to payment under a contract to a person who is to perform the transferor's obligations under the contract"1. This is essentially a novation of a contract under which there remain obligations to be performed and amounts payable for that performance (the law calls this an executory contract – it is not fully executed yet).
Despite the wide application of the PPSA, one can see that there are a number of exceptions to its application that will come up from time to time. There are many other less common exclusions from the PPSA, most of which are listed in section 8.
Notes:
1 PPSA section 8(f)(iii)
