Utah Code 70A-2a-305. Sale or sublease of goods by lessee
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(1) Subject to the provisions of Section 70A-2a-303 , a buyer or sublessee from the lessee of goods under an existing lease contract obtains, to the extent of the interest transferred, the leasehold interest in the goods that the lessee had or had power to transfer, and except as provided in Subsection (2) and Subsection 70A-2a-511(4) , takes subject to the existing lease contract. A lessee with a voidable leasehold interest has power to transfer a good leasehold interest to a good faith buyer for value or a good faith sublessee for value, but only to the extent set forth in the preceding sentence. When goods have been delivered under a transaction of lease, the lessee has that power even though:
Terms Used In Utah Code 70A-2a-305
- Contract: A legal written agreement that becomes binding when signed.
- Fraud: Intentional deception resulting in injury to another.
- Goods: means all things that are movable at the time of identification to the lease contract, or are fixtures. See Utah Code 70A-2a-103
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- 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. See Utah Code 70A-2a-103
- Lease contract: means the total legal obligation that results from the lease agreement as affected by this chapter and any other applicable rules of law. See Utah Code 70A-2a-103
- Leasehold interest: means the interest of the lessor or the lessee under a lease contract. See Utah Code 70A-2a-103
- Lessee: means a person who acquires the right to possession and use of goods under a lease. See Utah Code 70A-2a-103
- Lessor: means a person who transfers the right to possession and use of goods under a lease. See Utah Code 70A-2a-103
- State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
- Statute: A law passed by a legislature.
(1)(a) the lessor was deceived as to the identity of the lessee;
(1)(b) the delivery was in exchange for a check which is later dishonored; or
(1)(c) the delivery was procured through fraud punishable as larcenous under the criminal law.
(2) A buyer in the ordinary course of business or a sublessee in the ordinary course of business from a lessee who is a merchant dealing in goods of that kind to whom the goods were entrusted by the lessor obtains, to the extent of the interest transferred, all of the lessor’s and lessee’s rights to the goods, and takes free of the existing lease contract.
(3) A buyer or sublessee from the lessee of goods that are subject to an existing lease contract and are covered by a certificate of title issued under a statute of this state or of another jurisdiction takes no greater rights than those provided both by this section and by the certificate of title statute.