(1) As used in this section, "creation of a security interest"
includes the sale of a lease contract that is subject to Article 9,
secured transactions, by reason of Section 9--109(a)(3).
(2) Except as provided in subsection (3) and Section 9--407, a
provision in a lease agreement which (i) prohibits the voluntary or
involuntary transfer, including a transfer by sale, sublease, creation
or enforcement of a security interest, or attachment, levy, or other
judicial process, of an interest of a party under the lease contract or
of the lessor's residual interest in the goods, or (ii) makes such a
transfer an event of default, gives rise to the rights and remedies
provided in subsection (4), but a transfer that is prohibited or is an
event of default under the lease agreement is otherwise effective.
(3) A provision in a lease agreement which (i) prohibits a transfer of
a right to damages for default with respect to the whole lease contract
or of a right to payment arising out of the transferor's due performance
of the transferor's entire obligation, or (ii) makes such a transfer an
event of default, is not enforceable, and such a transfer is not a
transfer that materially impairs the prospect of obtaining return
performance by, materially changes the duty of, or materially increases
the burden or risk imposed on, the other party to the lease contract
within the purview of subsection (4).
(4) Subject to subsection (3) and Section 9--407:
(a) if a transfer is made which is made an event of default under
the lease agreement, the party to the lease contract not
making the transfer, unless that party waives the default or
otherwise agrees, has the rights and remedies described in
Section 2-A-501(2);
(b) if paragraph (a) is not applicable and if a transfer is made
that (i) is prohibited under a lease agreement or (ii)
materially impairs the prospect of obtaining return
performance by, materially changes the duty of, or materially
increases the burden or risk imposed on, the other party to
the lease contract, unless the party not making the transfer
agrees at any time to the transfer in the lease contract or
otherwise, then, except as limited by contract, (i) the
transferor is liable to the party not making the transfer for
damages caused by the transfer to the extent that the damages
could not reasonably be prevented by the party not making the
transfer and (ii) a court having jurisdiction may grant other
appropriate relief, including cancellation of the lease
contract or an injunction against the transfer.
(5) A transfer of "the lease" or of "all my rights under the lease",
or a transfer in similar general terms, is a transfer of rights and,
unless the language or the circumstances, as in a transfer for security,
indicate the contrary, the transfer is a delegation of duties by the
transferor to the transferee. Acceptance by the transferee constitutes a
promise by the transferee to perform those duties. The promise is
enforceable by either the transferor or the other party to the lease
contract.
(6) Unless otherwise agreed by the lessor and the lessee, a delegation
of performance does not relieve the transferor as against the other
party of any duty to perform or of any liability for default.
(7) In a consumer lease, to prohibit the transfer of an interest of a
party under the lease contract or to make a transfer an event of
default, the language must be specific, by a writing, and conspicuous.
Structure New York Laws
Part 3 - Effect of Lease Contract
2-A-301 - Enforceability of Lease Contract.
2-A-302 - Title to and Possession of Goods.
2-A-304 - Subsequent Lease of Goods by Lessor.
2-A-305 - Sale or Sublease of Goods by Lessee.
2-A-306 - Priority of Certain Liens Arising by Operation of Law.
2-A-308 - Special Rights of Creditors.
2-A-309 - Lessor's and Lessee's Rights When Goods Become Fixtures.
2-A-310 - Lessor's and Lessee's Rights When Goods Become Accessions.