8.2A-305 - A-305. Sale or sublease of goods by lessee.
§ 8.2A-305. Sale or sublease of goods by lessee.
(1) Subject to the provisions of § 8.2A-303, a buyer or sublessee from thelessee of goods under an existing lease contract obtains, to the extent ofthe interest transferred, the leasehold interest in the goods that the lesseehad or had power to transfer, and except as provided in subsection (2) ofthis section and subsection (4) of § 8.2A-511, takes subject to the existinglease contract. A lessee with a voidable leasehold interest has power totransfer a good leasehold interest to a good faith buyer for value or a goodfaith sublessee for value, but only to the extent set forth in the precedingsentence. When goods have been delivered under a transaction of lease thelessee has that power even though:
(a) The lessor was deceived as to the identity of the lessee;
(b) The delivery was in exchange for a check which is later dishonored; or
(c) The delivery was procured through fraud punishable as larcenous under thecriminal law.
(2) A buyer in the ordinary course of business or a sublessee in the ordinarycourse of business from a lessee who is a merchant dealing in goods of thatkind to whom the goods were entrusted by the lessor obtains, to the extent ofthe interest transferred, all of the lessor's and lessee's rights to thegoods, and takes free of the existing lease contract.
(3) A buyer or sublessee from the lessee of goods that are subject to anexisting lease contract and are covered by a certificate of title issuedunder a statute of this Commonwealth or of another jurisdiction takes nogreater rights than those provided both by this section and by thecertificate of title statute.
(1991, c. 536.)