Purchase Security Agreement for the United Kingdom

Purchase Security Agreement Template for England and Wales

A Purchase Security Agreement is a legal document governed by English and Welsh law that creates a security interest over specific purchased assets in favor of a secured party. It establishes the terms and conditions under which the security is granted, including the obligations being secured, representations and warranties, covenants, and enforcement mechanisms. The agreement must comply with UK security registration requirements and follows English law principles regarding creation and perfection of security interests.

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What is a Purchase Security Agreement?

A Purchase Security Agreement is commonly used in England and Wales when a party requires security over specific assets being purchased, often in conjunction with financing arrangements. The agreement provides the secured party with rights over the purchased assets as collateral for the underlying obligations. It must comply with English law requirements for creation and registration of security interests, particularly under the Law of Property Act 1925 and Companies Act 2006. The document typically includes detailed descriptions of the secured assets, representations about ownership and condition, maintenance obligations, and enforcement provisions.

What sections should be included in a Purchase Security Agreement?

1. Parties: Identification and details of the contracting parties

2. Background: Context and purpose of the security agreement

3. Definitions: Key terms used throughout the agreement

4. Grant of Security: Core provisions creating the security interest

5. Secured Obligations: Description of obligations being secured

6. Representations and Warranties: Statements of fact and assurances by the grantor

7. Covenants: Ongoing obligations of the grantor

8. Events of Default: Circumstances constituting default

9. Enforcement: Rights and remedies upon default

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

1. Further Assurance: Additional actions required to perfect security - used in complex security arrangements

2. Power of Attorney: Authority to act on grantor's behalf - used when enforcement may require direct action

3. Assignment and Transfer: Rights to transfer the security interest - used when transferability is important

What schedules should be included in a Purchase Security Agreement?

1. Schedule of Secured Assets: Detailed list of assets subject to security

2. Form of Notice: Template notices required for perfection

3. Filing and Registration Requirements: Specific requirements for different asset types

4. Existing Security Interests: List of pre-existing security interests

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

England and Wales

Publisher

Genie AI

Document Type

Security Agreement

Cost

Free to use
Relevant legal definitions
Industries

Law of Property Act 1925: Primary legislation governing the creation and transfer of interests in property, particularly relevant for fixed charges and mortgages. Essential for establishing the legal framework of security interests.

Companies Act 2006: Crucial legislation covering requirements for company charges, registration of security interests, and corporate capacity and authority to enter into security arrangements.

Consumer Credit Act 1974: Regulatory framework for consumer credit transactions, including consumer protection provisions and regulatory requirements for credit agreements involving consumers.

Sale of Goods Act 1979: Establishes fundamental principles of sale contracts, including provisions regarding title and transfer of property, relevant for the underlying purchase agreement.

Financial Services and Markets Act 2000: Regulatory framework for financial services, particularly relevant if the security agreement involves regulated financial products or services.

Financial Collateral Arrangements (No.2) Regulations 2003: Secondary legislation specifically dealing with financial collateral arrangements and their enforcement.

Enterprise Act 2002: Contains provisions regarding the enforcement of security interests and insolvency procedures, particularly relevant for default scenarios.

Companies House Registration Requirements: Procedural requirements for registering security interests at Companies House, including timing and documentation requirements.

Security Interest Priority Rules: Legal principles determining the priority of competing security interests, essential for establishing the effectiveness of the security.

Enforcement Rights Framework: Legal framework governing the rights and procedures for enforcing security interests in case of default.

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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