§ 6A-2.1-305 - Sale or sublease of goods by lessee.
SECTION 6A-2.1-305
§ 6A-2.1-305 Sale or sublease of goods bylessee. – (1) Subject to the provisions of § 6A-2.1-303, a buyer or sublessee fromthe lessee of goods under an existing lease contract obtains, to the extent ofthe interest transferred, the leasehold interest in the goods that the lesseehad or had power to transfer, and except as provided in subsection (2) and§ 6A-2.1-511(4), takes subject to the existing lease contract. A lesseewith a voidable leasehold interest has power to transfer a good leaseholdinterest 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 havebeen delivered under a transaction of lease the lessee has that power eventhough:
(a) The lessor was deceived as to the identity of the lessee;
(b) The delivery was in exchange for a check which is laterdishonored; or
(c) The delivery was procured through fraud punishable aslarcenous under the criminal law.
(2) A buyer in the ordinary course of business or a sublesseein the ordinary course of business from a lessee who is a merchant dealing ingoods of that kind to whom the goods were entrusted by the lessor obtains, tothe extent of the interest transferred, all of the lessor's and lessee's rightsto the goods, and takes free of the existing lease contract.
(3) A buyer or sublessee from the lessee 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.