70A-2a-304 - Subsequent lease of goods by lessor.
70A-2a-304. Subsequent lease of goods by lessor.
(1) Subject to Section 70A-2a-303, a subsequent lessee from a lessor of goods under anexisting lease contract obtains, to the extent of the leasehold interest transferred, the leaseholdinterest in the goods that the lessor had or had power to transfer, and except as provided inSubsection (2) and Subsection 70A-2a-527(4), takes subject to the existing lease contract. Alessor with voidable 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 preceding sentence. If goodshave been delivered under a transaction of purchase, the lessor has that power even though:
(a) the lessor's transferor was deceived as to the identity of the lessor;
(b) the delivery was in exchange for a check which is later dishonored;
(c) it was agreed that the transaction was to be a "cash sale;" or
(d) the delivery was procured through fraud punishable as larcenous under the criminallaw.
(2) A subsequent lessee in the ordinary course of business from a lessor who is amerchant dealing in goods of that kind to whom the goods were entrusted by the existing lesseeof that lessor before the interest of the subsequent lessee became enforceable against the lessorobtains, to the extent of 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 are subject to an existing leasecontract and are covered by a certificate of title issued under a statute of this state or of anotherjurisdiction takes no greater rights than those provided both by this section and by the certificateof title statute.
Amended by Chapter 237, 1993 General Session