§ 2A—303. Alienability of party’s interest under lease contract or of lessor’s residual interest
in goods; delegation of performance; transfer of rights
(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) of this title.
(2) Except as provided in subsection (3) of this section and section 9—407 of this title, 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) of this section, 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) of
this section.
(4) Subject to subsection (3) of this section and section 9—407 of this title:
(a) if a transfer is made which is made an event of default under a 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 2A—501(2) of this title;
(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. (Added 1993, No. 158 (Adj. Sess.), § 10, eff. Jan. 1, 1995; amended 1999, No. 106 (Adj. Sess.), § 11, eff. July 1, 2001.)