(a) A lease contract is not enforceable by way of action or defense unless:
(1) the total payments to be made under the lease contract, excluding payments for options to renew or buy, are less than $1,000; or
(2) there is a writing, signed by the party against whom enforcement is sought or by that party’s authorized agent, sufficient to indicate that a lease contract has been made between the parties and to describe the goods leased and the lease term.
(b) Any description of leased goods or of the lease term is sufficient and satisfies Subsection (a)(2), whether or not it is specific, if it reasonably identifies what is described.
Terms Used In Texas Business and Commerce Code 2A.201
- Contract: A legal written agreement that becomes binding when signed.
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Goods: means all things that are moveable at the time of identification to the lease contract, or are fixtures (Section Texas Business and Commerce Code 2A.103
- 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 Texas Business and Commerce Code 2A.103
- Lease contract: means the total legal obligation that results from the lease agreement as affected by this chapter and any other applicable rules of law. See Texas Business and Commerce Code 2A.103
- Lessee: means a person who acquires the right to possession and use of goods under a lease. See Texas Business and Commerce Code 2A.103
- Lessor: means a person who transfers the right to possession and use of goods under a lease. See Texas Business and Commerce Code 2A.103
- Signed: includes any symbol executed or adopted by a person with present intention to authenticate a writing. See Texas Government Code 311.005
- Testimony: Evidence presented orally by witnesses during trials or before grand juries.
(c) A writing is not insufficient because it omits or incorrectly states a term agreed upon, but the lease contract is not enforceable under Subsection (a)(2) beyond the lease term and the quantity of goods shown in the writing.
(d) A lease contract that does not satisfy the requirements of Subsection (a), but which is valid in other respects, is enforceable:
(1) if the goods are to be specially manufactured or obtained for the lessee and are not suitable for lease or sale to others in the ordinary course of the lessor‘s business, and the lessor, before notice of repudiation is received and under circumstances that reasonably indicate that the goods are for the lessee, has made either a substantial beginning of their manufacture or commitments for their procurement;
(2) if the party against whom enforcement is sought admits in that party’s pleading, testimony or otherwise in court that a lease contract was made, but the lease contract is not enforceable under this provision beyond the quantity of goods admitted;
(3) with respect to goods that have been received and accepted by the lessee; or
(4) if the lease contract would otherwise be enforceable under general principles of equitable estoppel, detrimental reliance or unjust enrichment.
(e) The lease term under a lease contract referred to in Subsection (d) is:
(1) if there is a writing signed by the party against whom enforcement is sought or by that party’s authorized agent specifying the lease term, the term so specified;
(2) if the party against whom enforcement is sought admits in that party’s pleading, testimony, or otherwise in court a lease term, the term so admitted; or
(3) a reasonable lease term.