Section 2-A-303. Alienability of Party's Interest Under Lease Contract

Terms Used In N.Y. Uniform Commercial Code 2-A-303

  • Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
  • Consumer lease: means a lease that a lessor regularly

    engaged in the business of leasing or selling makes to a

    lessee who is an individual and who takes under the lease

    primarily for personal, family, or household purposes. See N.Y. Uniform Commercial Code 2-A-103
  • Contract: A legal written agreement that becomes binding when signed.
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Goods: means all things that are movable at the time of

    identification to the lease contract, or are fixtures

    (Section 2-A-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 N.Y. Uniform Commercial Code 2-A-103
  • Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
  • 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: 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 N.Y. Uniform Commercial Code 2-A-103
  • 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 agreement: means the bargain, with respect to the

    lease, of the lessor and the lessee in fact as found in their

    language or by implication from other circumstances including

    course of dealing or usage of trade or course of performance

    as provided in this Article. See N.Y. Uniform Commercial Code 2-A-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 N.Y. Uniform Commercial Code 2-A-103
  • Lessee: means a person who acquires the right to possession

    and use of goods under a lease. See N.Y. Uniform Commercial Code 2-A-103
  • Lessor: means a person who transfers the right to possession

    and use of goods under a lease. See N.Y. Uniform Commercial Code 2-A-103
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Sublease: means a lease of goods the right to possession and

    use of which was acquired by the lessor as a lessee under an

    existing lease. See N.Y. Uniform Commercial Code 2-A-103

or of Lessor's Residual Interest in Goods; Delegation

of Performance; Transfer of Rights.

(1) As used in this section, "creation of a security interest" includes the sale of a lease contract that is subject to Article 9, secured transactions, by reason of Section 9–109(a)(3).

(2) Except as provided in subsection (3) and Section 9–407, a provision in a lease agreement which (i) prohibits the voluntary or involuntary transfer, including a transfer by sale, sublease, creation or enforcement of a security interest, or attachment, levy, or other judicial process, of an interest of a party under the lease contract or of the lessor's residual interest in the goods, or (ii) makes such a transfer an event of default, gives rise to the rights and remedies provided in subsection (4), but a transfer that is prohibited or is an event of default under the lease agreement is otherwise effective.

(3) A provision in a lease agreement which (i) prohibits a transfer of a right to damages for default with respect to the whole lease contract or of a right to payment arising out of the transferor's due performance of the transferor's entire obligation, or (ii) makes such a transfer an event of default, is not enforceable, and such a transfer is not a transfer that materially impairs the prospect of obtaining return performance by, materially changes the duty of, or materially increases the burden or risk imposed on, the other party to the lease contract within the purview of subsection (4).

(4) Subject to subsection (3) and Section 9–407:

(a) if a transfer is made which is made an event of default under

the lease agreement, the party to the lease contract not

making the transfer, unless that party waives the default or

otherwise agrees, has the rights and remedies described in

Section 2-A-501(2);

(b) if paragraph (a) is not applicable and if a transfer is made

that (i) is prohibited under a lease agreement or (ii)

materially impairs the prospect of obtaining return

performance by, materially changes the duty of, or materially

increases the burden or risk imposed on, the other party to

the lease contract, unless the party not making the transfer

agrees at any time to the transfer in the lease contract or

otherwise, then, except as limited by contract, (i) the

transferor is liable to the party not making the transfer for

damages caused by the transfer to the extent that the damages

could not reasonably be prevented by the party not making the

transfer and (ii) a court having jurisdiction may grant other

appropriate relief, including cancellation of the lease

contract or an injunction against the transfer.

(5) A transfer of "the lease" or of "all my rights under the lease", or a transfer in similar general terms, is a transfer of rights and, unless the language or the circumstances, as in a transfer for security, indicate the contrary, the transfer is a delegation of duties by the transferor to the transferee. Acceptance by the transferee constitutes a promise by the transferee to perform those duties. The promise is enforceable by either the transferor or the other party to the lease contract.

(6) Unless otherwise agreed by the lessor and the lessee, a delegation of performance does not relieve the transferor as against the other party of any duty to perform or of any liability for default.

(7) In a consumer lease, to prohibit the transfer of an interest of a party under the lease contract or to make a transfer an event of default, the language must be specific, by a writing, and conspicuous.

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