(a) Except as otherwise provided in subsection (b), a term in a lease agreement is ineffective to the extent that it:
(1) prohibits, restricts, or requires the consent of a party to the lease to the assignment or transfer of, or the creation, attachment, perfection, or enforcement of a security interest in, an interest of a party under the lease contract or in the lessor's residual interest in the goods; or
(2) provides that the assignment or transfer or the creation, attachment, perfection, or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination, or remedy under the lease.
(b) Except as otherwise provided in § 4-2A-303(7), a term described in subsection (a)(2) is effective to the extent that there is:
(1) a transfer by the lessee of the lessee's right of possession or use of the goods in violation of the term; or
(2) a delegation of a material performance of either party to the lease contract in violation of the term.
(c) The creation, attachment, perfection, or enforcement of a security interest in the lessor's interest under the lease contract or the lessor's residual interest in the goods is not a transfer that materially impairs the lessee's prospect of obtaining return performance or materially changes the duty of or materially increases the burden or risk imposed on the lessee within the purview of § 4-2A-303(4) unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the lessor.
Structure Arkansas Code
Title 4 - Business and Commercial Law
Subtitle 1 - Uniform Commercial Code
Chapter 9 - Secured Transactions
Part 4 - Rights of Third Parties
§ 4-9-401. Alienability of debtor's rights
§ 4-9-402. Secured party not obligated on contract of debtor or in tort
§ 4-9-403. Agreement not to assert defenses against assignee
§ 4-9-404. Rights acquired by assignee — Claims and defenses against assignee
§ 4-9-405. Modification of assigned contract
§ 4-9-409. Restrictions on assignment of letter-of-credit rights ineffective