§ 4-2.5-304 — Subsequent lease of goods by lessor

Colorado § 4-2.5-304

• Jurisdiction: Colorado
• Title 04: Uniform
• Art.: Leases

Text

(1) Subject to section 4-2.5-303, a subsequent lessee from a lessor of goods under an existing lease
contract obtains, to the extent of the leasehold interest transferred, the leasehold
interest in the goods that the lessor had or had power to transfer, and except as
provided in subsection (2) of this section and section 4-2.5-527 (4), takes subject to
the existing lease contract. A lessor with voidable title has power to transfer a good
leasehold interest to a good faith subsequent lessee for value, but only to the
extent set forth in the preceding sentence. If goods have been delivered under a
transaction of purchase, the lessor has that power even though:

(a) The lessor's transferor was deceived as to the identity of the lessor;

(b) The delivery was in exchange for a check which is later dishonored;

(c) It was agreed that the transaction was to be a cash sale; or

(d) The delivery was procured through fraud punishable as larcenous under
the criminal law.

(2) A subsequent lessee in the ordinary course of business from a lessor who
is a merchant dealing in goods of that kind to whom the goods were entrusted by
the existing lessee of that lessor before the interest of the subsequent lessee
became enforceable against that lessor obtains, to the extent of the leasehold
interest transferred, all of that lessor's and the existing lessee's rights to the
goods, and takes free of the existing lease contract.

(3) A subsequent lessee from the lessor of goods that are subject to an
existing lease contract and are covered by a certificate of title issued under a
statute of this state or of another jurisdiction takes no greater rights than those
provided both by this section and by the certificate of title statute.

Legislative History

Source: L. 91: Entire article added, p. 290, � 1, effective July 1, 1992.