I recently had a meeting with one of my clients, Kieran a wholesale/installation business located in Marrickville in Sydney’s inner west. He was owed $80,000 by a company he had been dealing with who looked like they were going into administration. EC had drafted Terms of Trade previously for my client, therefore I felt comfortable that he had the correct clauses relating to debt recovery and the Personal Property Securities Register (PPSR) that would easily allow him to do a registration on the PPS Register over his work showing ownership and therefore enabling him to become a secured creditor in the event customer became insolvent.
The only problem was my Kieran did not get the Terms of Trade signed by his client. Kieran supplied the terms of trade with his quote and was directed to do the work via email but no signed Terms of Trade were sent back to Kieran. I obtained advice from EC’s PPSR Department and was told that to do valid registrations on the PPS Register there must be a signed contract. I lost sleep over this worrying for Kieran but you can’t cry over spilt milk. The moral of this sad tale is please get your Terms of Trade drafted to include all relevant solicitor approved clauses and ensure they are regularly reviewed and updated with amendments to legislation so they remain current. Finally make sure you get them signed to complete valid registrations on the PPSR allowing you to become a secured creditor (who ranks above the ATO) in the event your client becomes insolvent.