RS 10:9-407

233 words·~1 min read·/la/title-10/10-341

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

RS 10:9-407

§9-407. Restrictions on creation or enforcement of security interest in leasehold interest or in lessor's residual interest

(a)Term restricting assignment generally ineffective. Except as otherwise provided in Subsection (b), a term in a lease is ineffective to the extent that it:

(1)prohibits, restricts, or requires the consent of a party to the lease to the creation, attachment, perfection, or enforcement of a security interest in an interest of a party under the lease or in the lessor's residual interest in the goods; or

(2)provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the lease.

(b)Effectiveness of certain terms. A term described in Subsection (a)(2) is effective to the extent that there is:

(1)a transfer by the lessee of the lessee's right of possession or use of the goods in violation of the term; or

(2)a delegation of a material performance of either party to the lease in violation of the term.

(c)[Reserved.]

Acts 1988, No. 528, §1, eff. Jan. 1, 1990; Acts 1989, No. 135, §7, eff. Jan. 1, 1990; Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 1991, No. 377, §4, eff. Jan. 1, 1992; Acts 2001, No. 128, §1, eff. July 1, 2001.