§ 6A-2.1-303 - Alienability of party's interest under lease contract or of lessor's residual interest in goods – Delegation of performance – Transfer of rights.
SECTION 6A-2.1-303
§ 6A-2.1-303 Alienability of party'sinterest under lease contract 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 thesale of a lease contract that is subject to chapter 9, secured transactions, byreason of § 6A-9-109(a)(3).
(2) Except as provided in subsection (3) and § 6A-9-407,a provision in a lease agreement which (i) prohibits the voluntary orinvoluntary transfer, including a transfer by sale, sublease, creation orenforcement of a security interest, or attachment, levy, or other judicialprocess, of an interest of a party under the lease contract or of the lessor'sresidual interest in the goods, or (ii) makes such a transfer an event ofdefault, gives rise to the rights and remedies provided in subsection (4), buta transfer that is prohibited or is an event of default under the leaseagreement is otherwise effective.
(3) A provision in a lease agreement which (i) prohibits atransfer of a right to damages for default with respect to the whole leasecontract or of a right to payment arising out of the transferor's dueperformance of the transferor's entire obligation, or (ii) makes such atransfer an event of default, is not enforceable, and such a transfer is not atransfer that materially impairs the prospect of obtaining return performanceby, materially changes the duty of, or materially increases the burden or riskimposed on, the other party to the lease contract within the purview ofsubsection (4).
(4) Subject to subsection (3) and § 6A-9-407:
(a) if a transfer is made which is made an event of defaultunder a lease agreement, the party to the lease contract not making thetransfer, unless that party waives the default or otherwise agrees, has therights and remedies described in § 6A-2.1-501(2);
(b) if paragraph (a) is not applicable and if a transfer ismade that (i) is prohibited under a lease agreement or (ii) materially impairsthe prospect of obtaining return performance by, materially changes the dutyof, or materially increases the burden or risk imposed on, the other party tothe lease contract, unless the party not making the transfer agrees at any timeto the transfer in the lease contract or otherwise, then, except as limited bycontract, (i) the transferor is liable to the party not making the transfer fordamages caused by the transfer to the extent that the damages could notreasonably be prevented by the party not making the transfer and (ii) a courthaving jurisdiction may grant other appropriate relief, including cancellationof the lease contract or an injunction against the transfer.
(5) A transfer of "the lease" or of "all my rights under thelease," 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 transferorto the transferee. Acceptance by the transferee constitutes a promise by thetransferee to perform those duties. The promise is enforceable by either thetransferor or the other party to the lease contract.
(6) Unless otherwise agreed by the lessor and the lessee, adelegation of performance does not relieve the transferor as against the otherparty of any duty to perform or of any liability for default.
(7) In a consumer lease, to prohibit the transfer of aninterest of a party under the lease contract or to make a transfer an event ofdefault, the language must be specific, by a writing, and conspicuous.