N.Y. Uniform Commercial Code Law § 2-a-303: Alienability of Party's Interest Under Lease Contract or of Lessor's Residual Interest in Goods; Delegation of Performance; Transfer of R...

Section 2-A-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).

(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.