§ 26-1-2.1-304 — Subsequent lease of goods by lessor

Indiana § 26-1-2.1-304

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 2.1: Leases

Text

(1) Subject to IC 26-1-2.1-303, 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) and IC 26-1-2.1-527(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

As added by P.L.189-1991, SEC.3.