Missouri Revised Statutes













Chapter 400

Uniform Commercial Code

←400.2A-302

Section 400.2A-303.1

400.2A-304→

August 28, 2015

Alienability of party's interest under lease contract or of lessor's residual interest in goods--delegation of performance--transfer of rights.

400.2A-303. (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 400.9-109(a)(2).



(2) Except as provided in subsection (3) and section 400.9-407, 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), 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).



(4) Subject to subsection (3) and section 400.9-407:



(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 400.2A-501(2);



(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.



(L. 1992 S.B. 448, A.L. 2001 S.B. 288)



Effective 7-01-01





1992



1992



400.2A-303. (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

400.9-102(1)(b).



(2) Except as provided in subsections (3) and (4), 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 (5), 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

the creation or enforcement of a security interest in an interest

of a party under the lease contract or in the lessor's residual

interest in the goods, or (ii) makes such a transfer an event of

default, is not enforceable unless, and then only to the extent

that, there is an actual transfer by the lessee of the lessee's

right of possession or use of the goods in violation of the

provision or an actual delegation of a material performance of

either party to the lease contract in violation of the provision.

Neither the granting nor the enforcement of a security interest

in (i) the lessor's interest under the lease contract or (ii) the

lessor's residual interest in the goods is 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 lessee within the purview of

subsection (5) unless, and then only to the extent that, there is

an actual delegation of a material performance of the lessor.



(4) 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 (5).



(5) Subject to subsections (3) and (4):



(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 400.2A-501(2);



(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.



(6) 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.



(7) 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.



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