411.303 Alienability of party’s interest under lease contract or of lessor’s residual interest in goods; delegation of performance; transfer of rights.

451 words·~2 min read·/wi/chapter-411/411-303-2

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

(1)In this section, “creation of a security interest” includes the sale of a lease contract that is subject to ch. 409 under s. 409.109

(c).

(2)Except as provided in sub.

(3)and s. 409.407 , a provision in a lease agreement that 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 that makes such a transfer an event of default, gives rise to the rights and remedies provided in sub.

(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 that 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 that 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 sub.

(4).

(4)Subject to sub.

(3)and s. 409.407 :

(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 under s. 411.501

(2).

(b)If par.

(a)is not applicable and if a transfer is made that is prohibited under a lease agreement or 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, 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, all of the following apply:

1. 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.

2. A court having jurisdiction may grant other appropriate relief, including cancellation of the lease contract or an injunction against the transfer.