Massachusetts General Laws ch. 106 sec. 2A-304 – Subsequent Lease of Goods by Lessor
Section 2A–304. (1) Subject to Section 2A–303, a subsequent lessee from a lessor of goods under an existing lease contract obtains, to the extent of the leasehold interest transferred, the leasehold interest in the goods that the lessor had or had power to transfer, and except as provided in subsection (2) and Section 2A–527(4), takes subject to the existing lease contract. A lessor with voidable title has power to transfer a good leasehold interest to a good faith subsequent lessee for value, but only to the extent set forth in the preceding sentence. If goods have been delivered under a transaction of purchase, the lessor has that power even though:
Terms Used In Massachusetts General Laws ch. 106 sec. 2A-304
- Contract: A legal written agreement that becomes binding when signed.
- Fraud: Intentional deception resulting in injury to another.
- Goods: means all things that are movable at the time of identification to the lease contract, or are fixtures (Section 2A–309), but the term does not include money, documents, instruments, accounts, chattel paper, general intangibles, or minerals or the like, including oil and gas, before extraction. See Massachusetts General Laws ch. 106 sec. 2A-103
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Lease: means a transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease. See Massachusetts General Laws ch. 106 sec. 2A-103
- Lease contract: means the total legal obligation that results from the lease agreement as affected by this Article and any other applicable rules of law. See Massachusetts General Laws ch. 106 sec. 2A-103
- Leasehold interest: means the interest of the lessor or the lessee under a lease contract. See Massachusetts General Laws ch. 106 sec. 2A-103
- Lessee: means a person who acquires the right to possession and use of goods under a lease. See Massachusetts General Laws ch. 106 sec. 2A-103
- Lessor: means a person who transfers the right to possession and use of goods under a lease. See Massachusetts General Laws ch. 106 sec. 2A-103
- Purchase: includes taking by sale, lease, mortgage, security interest, pledge, gift, or any other voluntary transaction creating an interest in goods. See Massachusetts General Laws ch. 106 sec. 2A-103
- Statute: A law passed by a legislature.
(a) the lessor’s transferor was deceived as to the identity of the lessor;
(b) the delivery was in exchange for a check which is later dishonored;
(c) it was agreed that the transaction was to be a ”cash sale”; or
(d) the delivery was procured through fraud punishable as larcenous under the criminal law.
(2) A subsequent lessee in the ordinary course of business from a lessor who is a merchant dealing in goods of that kind to whom the goods were entrusted by the existing lessee of that lessor before the interest of the subsequent lessee became enforceable against that lessor obtains, to the extent of the leasehold interest transferred, all of that lessor’s and the existing lessee’s rights to the goods, and takes free of the existing lease contract.
(3) A subsequent lessee from the lessor of goods that are subject to an existing lease contract and are covered by a certificate of title issued under a statute of the commonwealth or of another jurisdiction takes no greater rights than those provided both by this section and by the certificate of title statute.