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ARTICLE · 11 JULY 2016

A Banker Asked Us: Unsigned Security Agreements In Ontario

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Our borrower was supposed to provide a general security agreement to secure its loan, and our back office made an Ontario PPSA registration against the borrower in anticipation of that.

CanadaFinance and Banking
Christine Marchetti
Christine Marchetti
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Q: Our borrower was supposed to provide a general security agreement to secure its loan, and our back office made an Ontario PPSA1 registration against the borrower in anticipation of that. The CFO sent us an email that purported to attach a signed security agreement, but I see now upon viewing the attachment that the agreement was never actually signed for some reason. Can we rely upon the email and its unsigned attachment? The CFO recently left the borrower so I am reluctant to go back and ask his replacement for this to be done.

A: Pursuant to the Ontario PPSA, a security interest is not enforceable against a third party unless it has "attached" to the collateral being charged.

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