§ 2-A-303 — Alienability of Party's Interest Under Lease Contract or of Lessor's Residual Interest in Goods; Delegation of Performance; Transfer of R...

Section 2-A-303. Alienability of Party's Interest Under Lease Contract\n or of Lessor's Residual Interest in Goods; Delegation\n of Performance; Transfer of Rights.\n (1) As used in this section, "creation of a security interest"\nincludes the sale of a lease contract that is subject to Article 9,\nsecured transactions, by reason of Section 9--109(a)(3).\n (2) Except as provided in subsection (3) and Section 9--407, a\nprovision in a lease agreement which (i) prohibits the voluntary or\ninvoluntary transfer, including a transfer by sale, sublease, creation\nor enforcement of a security interest, or attachment, levy, or other\njudicial process, of an interest of a party under the lease contract or\nof the lessor's residual interest in the goods, or (ii) makes such a\ntransfer an event of default, gives rise to the rights and remedies\nprovided in subsection (4), but a transfer that is prohibited or is an\nevent of default under the lease agreement is otherwise effective.\n (3) A provision in a lease agreement which (i) prohibits a transfer of\na right to damages for default with respect to the whole lease contract\nor of a right to payment arising out of the transferor's due performance\nof the transferor's entire obligation, or (ii) makes such a transfer an\nevent of default, is not enforceable, and such a transfer is not a\ntransfer that materially impairs the prospect of obtaining return\nperformance by, materially changes the duty of, or materially increases\nthe burden or risk imposed on, the other party to the lease contract\nwithin the purview of subsection (4).\n (4) Subject to subsection (3) and Section 9--407:\n (a) if a transfer is made which is made an event of default under\n the lease agreement, the party to the lease contract not\n making the transfer, unless that party waives the default or\n otherwise agrees, has the rights and remedies described in\n Section 2-A-501(2);\n (b) if paragraph (a) is not applicable and if a transfer is made\n that (i) is prohibited under a lease agreement or (ii)\n materially impairs the prospect of obtaining return\n performance by, materially changes the duty of, or materially\n increases the burden or risk imposed on, the other party to\n the lease contract, unless the party not making the transfer\n agrees at any time to the transfer in the lease contract or\n otherwise, then, except as limited by contract, (i) the\n transferor is liable to the party not making the transfer for\n damages caused by the transfer to the extent that the damages\n could not reasonably be prevented by the party not making the\n transfer and (ii) a court having jurisdiction may grant other\n appropriate relief, including cancellation of the lease\n contract or an injunction against the transfer.\n (5) A transfer of "the lease" or of "all my rights under the lease",\nor a transfer in similar general terms, is a transfer of rights and,\nunless the language or the circumstances, as in a transfer for security,\nindicate the contrary, the transfer is a delegation of duties by the\ntransferor to the transferee. Acceptance by the transferee constitutes a\npromise by the transferee to perform those duties. The promise is\nenforceable by either the transferor or the other party to the lease\ncontract.\n (6) Unless otherwise agreed by the lessor and the lessee, a delegation\nof performance does not relieve the transferor as against the other\nparty of any duty to perform or of any liability for default.\n (7) In a consumer lease, to prohibit the transfer of an interest of a\nparty under the lease contract or to make a transfer an event of\ndefault, the language must be specific, by a writing, and conspicuous.\n