Commonwealth Consolidated Acts Commonwealth Consolidated ActsDeemed goods security interest
(1) If a sale or lease of goods creates an account or chattel paper, and the account or chattel paper is transferred to another person, the transferee is taken to have a security interest (the deemed goods security interest ) in the goods if, at a particular time (the repossession time ) the goods come into the possession of the transferor, or of the transferee, in any of the following circumstances:
(a) in the case of a sale--the contract of sale is rescinded;
(b) in the case of a lease--the lease expires or is rescinded;
(c) the transferee seizes the goods in the exercise of a right in enforcing a security agreement;
(d) the transferor repossesses the goods in the exercise of a right in enforcing the contract of sale or the lease;
(e) any other circumstances prescribed by the regulations.
Note: Section 76 deals with the priority of a security interest that reattaches under this section.
(2) The deemed goods security interest attaches to the goods at the repossession time.
Deemed goods security interest temporarily perfected for 5 business days
(3) If the transferee has a security interest in the account or chattel paper that is perfected by possession or registration at the repossession time, the deemed goods security interest is temporarily perfected for the period starting at the possession time and ending at the end of 5 business days after the day the repossession time occurs.
Deemed goods security interest becomes unperfected after 5 business days
(4) However, the deemed goods security interest becomes unperfected at the end of the period mentioned in subsection (3), unless the deemed goods security interest is perfected otherwise than under subsection (3) before the end of the period.
Note: Section 76 deals with the priority of a deemed goods security interest.