Leases - Nybar Round 2 (Do It This Time)

Front 1

What is a lease? (define)

Back 1

A transfer of the rights to possession and use of goods for a term in return for consideration. Like renting.

Front 2

Lease v. disguised sale - how tell the difference?

Back 2

It is disguised sale on credit if:
1) Lessee has no right to terminate his obligation to pay durring the lease term; AND
2) Lease says the lessee will become the owner or have option to purchase at nominal consideration.

Front 3

SOF for lease

Back 3

Lease must be in writing if the total payments under the lease will be 1K or more AND the writing must be signed, describe the leased goods and the lease term and indicate thatg a lease contract has been made. Must specify quantity.

Front 4

Is there a battle of the forms provision?

Back 4

NO

Front 5

Consumer protections with leases

Back 5

If the lease is a consumer, UCC gives rules to protect including
1) accelaration clause requries, lessor must show good faith.
2) Unconcionability can be both substantive (bad lease) or procedural (unfairly got them to sign)

Front 6

Are the same warranties you see in regular article 2 seen in UCC:?

Back 6

Yes

Front 7

Are there exceptions/extra sections?

Back 7

Yes - Hell or Highwater Clause - lessee has an absolute oblication to make the payments, even if the equipment is defective. Lessee must continue to work with the supplier. (not consumer leases though)

Front 8

REmedies - Default by Lessor

Back 8

Lessee has same rights as in UCC - can accept and recover damages for breach of warranty, reject the goods or seek market price -lease differential

Front 9

Remedy - Default by Lessee

Back 9

1) cancel the lease contract
2) withold delivery of goods
3) stop delivery by bailee
4) dispose or or retain the goods and recover damages, recover rent or excercise any other rights

Front 10

What are the limitations on recovery?

Back 10

Limited to actual damages
Can also have rent IF the goods were neither repossessed or tendered to the lessor.

Front 11

Can you sublease (lease already leased equipment/goods)

Back 11

Yes - even if the agreement says no. However, if the lease defies a sublease as a material breach, then the lessor can get damages

Front 12

Is transfering rights in a lease(lessor) a material breach?

Back 12

Sometimes. If there are no duties due, then no. But if the lessor has duties (opperating lease) then it is material.