§ 4-2.5-305 — Sale or sublease of goods by lessee

Colorado § 4-2.5-305

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

Text

(1) Subject to the
provisions of section 4-2.5-303, a person claiming as a buyer or sublessee of goods
under an existing lease contract obtains, to the extent of the interest transferred,
the leasehold interest in the goods that the transferor to that person had or had
power to transfer, and except as provided in subsection (2) of this section and
section 4-2.5-511 (4), takes subject to the existing lease contract. A lessee with a
voidable leasehold interest has power to transfer a good leasehold interest to a
good faith buyer for value or a good faith sublessee for value, but only to the extent
set forth in the preceding sentence. When goods have been delivered under a
transaction of lease the lessee has that power even though:

(a) The lessor was deceived as to the identity of the lessee;

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

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

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

(3) A buyer or sublessee from the lessee 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. 291, � 1, effective July 1, 1992.