§ 554.13305 — Sale or sublease of goods by lessee

Iowa § 554.13305

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 554: UNIFORM COMMERCIAL CODE

Text

1. Subject to the provisions of section 554.13303, a buyer or sublessee from the lessee of
goods under an existing lease contract obtains, to the extent of the interest transferred, the
leasehold interest in the goods that the lessee had or had power to transfer, and except as
provided in subsection 2 and section 554.13511, subsection 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

wereentrustedbythelessorobtains, totheextentoftheinteresttransferred, allofthelessor’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.