§ 6A-2.1-304 - Subsequent lease of goods by lessor.
SECTION 6A-2.1-304
§ 6A-2.1-304 Subsequent lease of goods bylessor. – (1) Subject to § 6A-2.1-303, a subsequent lessee from a lessor of goodsunder an existing lease contract obtains, to the extent of the leaseholdinterest transferred, the leasehold interest in the goods that the lessor hador had power to transfer, and except as provided in subsection (2) and §6A-2.1-527(4), takes subject to the existing lease contract. A lessor withvoidable title has power to transfer a good leasehold interest to a good faithsubsequent lessee for value, but only to the extent set forth in the precedingsentence. If goods have been delivered under a transaction of purchase, thelessor has that power even though:
(a) The lessor's transferor was deceived as to the identityof the lessor;
(b) The delivery was in exchange for a check which is laterdishonored;
(c) It was agreed that the transaction was to be a "cashsale"; or
(d) The delivery was procured through fraud punishable aslarcenous under the criminal law.
(2) A subsequent lessee in the ordinary course of businessfrom a lessor who is a merchant dealing in goods of that kind to whom the goodswere entrusted by the existing lessee of that lessor before the interest of thesubsequent lessee became enforceable against that lessor obtains, to the extentof the leasehold interest transferred, all of that lessor's and the existinglessee's rights to the goods, and takes free of the existing lease contract.
(3) A subsequent lessee from the lessor of goods that aresubject to an existing lease contract and are covered by a certificate of titleissued under a statute of this state or of another jurisdiction takes nogreater rights than those provided both by this section and by the certificateof title statute.