§ 41-02.1-35 — (2A-305) Sale or sublease of goods by lessee

North Dakota § 41-02.1-35

• Jurisdiction: North Dakota
• Title 41: Uniform Commercial Code
• Ch. 41-02.1: Leases

Text

1. Subject to section 41-02.1-33, 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 subsections 2 and 4 of section 41-02.1-59, 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 transfer of lease, the lessee has that power even though any
of the following are met:
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.
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.