Texas Business and Commerce Code 2A.407 – Irrevocable Promises: Finance Leases
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(a) In the case of a finance lease that is not a consumer lease, a term in the lease agreement that provides that the lessee‘s promises under the lease contract become irrevocable and independent upon the lessee’s acceptance of the goods is enforceable.
(b) A promise that has become irrevocable and independent under Subsection (a):
(1) is effective and enforceable between the parties, and by or against third parties including assignees of the parties; and
(2) is not subject to cancellation, termination, modification, repudiation, excuse, or substitution without the consent of the party to whom the promise runs.
Terms Used In Texas Business and Commerce Code 2A.407
- Consumer lease: means a lease that a lessor regularly engaged in the business of leasing or selling makes to a lessee who is an individual and who takes under the lease primarily for a personal, family, or household purpose, if the total payments to be made under the lease contract, excluding payments for options to renew or buy, do not exceed $25,000. See Texas Business and Commerce Code 2A.103
- Contract: A legal written agreement that becomes binding when signed.
- Goods: means all things that are moveable at the time of identification to the lease contract, or are fixtures (Section Texas Business and Commerce Code 2A.103
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Lease: means a transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease. See Texas Business and Commerce Code 2A.103
- Lessee: means a person who acquires the right to possession and use of goods under a lease. See Texas Business and Commerce Code 2A.103