§2A-303. Alienability of party's interest under lease contract or of lessor's residual

Link to law: http://legislature.vermont.gov/statutes/section/09A/002A/00303
Published: 2015

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Title

09A

:
Uniform Commercial Code






Chapter

002A

:
Leases











 

§

2A-303. Alienability of party's interest 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 the sale of

a lease contract that is subject to Article 9, Secured Transactions, by reason

of section 9-109(a)(3) of this title.

(2) Except as

provided in subsection (3) of this section and section 9-407 of this title, 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) of

this section, 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) of this section.

(4) Subject to

subsection (3) of this section and section 9-407 of this title:

(a) if a

transfer is made which is made an event of default under a 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 2A-501(2) of this title;

(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. (Added 1993, No. 158 (Adj. Sess.), §

10, eff. Jan. 1, 1995; amended 1999, No. 106 (Adj. Sess.), § 11, eff. July 1,

2001.)
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