If the answer to this question is yes, you are likely to have one or more of the following terms:
- a retention of title (or Romalpa) clause;
- a charging clause allowing you to charge your customer’s property with the payment for goods or services; or
- a limitation of liability clause.
From 30 January 2012, the Personal Property Securities Register commenced operation. Inrelation to your terms and conditions, the effect of this is that, amongst other things:
- if you have a retention of title clause – you can now register your security interest in the goods sold so as to protect that interest (including your interest in goods which become co-mingled with or incorporated into other goods) against third parties such as a liquidator of the customer;
- if you have a charging clause – you will need to update your provisions in relation to the registration of security interests over the customer’s personal property;
- if you hire goods to third parties – you will need to update your terms and conditions to allow you to register a security interest over the goods hired out. If you fail to do so, there are circumstances where you can lose ownership of your goods (e.g. when your customer goes into liquidation).Also, the replacement of the Trade Practices Act 1975 with the Competition and Consumer Act 2010 means that suppliers with limitation of liability clauses need to update their terms and conditions to reflect the new terminology and some other changes which have resulted.As these changes are upon us, it is important to review your terms and conditions now to ensure that your interests are capable of being protected.