§12A-2A-303. Alienability of party's interest under lease contract
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/ok/title-12a-uniform-commercial-code/12a-2a-303·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
or of lessor's residual interest in goods; delegation of performance; transfer of rights.
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 of this title, Secured Transactions, by reason of paragraph
(3)of subsection
(a)of Section 1-9-109 of this title.
(2)Except as provided in subsection
(3)of Section 1-9-407 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 of 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 1-9- 407 of this article:
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 subsection
(2)of
Section 2A-501 of this title; or
(b)if paragraph
(a)of this subsection 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 by Laws 1988, c. 86, § 33, eff. Nov. 1, 1988. Amended by Laws 1991, c. 117, § 6, eff. Jan. 1, 1992; Laws 2000, c. 371, § 154, eff. July 1, 2001.