N.Y. Uniform Commercial Code 2-A-304 – Subsequent Lease of Goods by Lessor
Section 2-A-304. Subsequent Lease of Goods by Lessor.
Terms Used In N.Y. Uniform Commercial Code 2-A-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 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 - 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 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 - Leasehold interest: means the interest of the lessor or the
lessee under a lease contract. 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 - Purchase: includes taking by sale, lease, mortgage, security
interest, pledge, gift, or any other voluntary transaction
creating an interest in goods. See N.Y. Uniform Commercial Code 2-A-103 - Statute: A law passed by a legislature.
(1) Subject to Section 2-A-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 2-A-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:
(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 a prior lessee 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 prior 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 this state or of another jurisdiction takes no greater rights than those provided both by this section and by the certificate of title statute.