2023 New York Laws › UCC - Uniform Commercial Code › Article 2-A - Leases › Part 3 - Effect of Lease Contract › 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.

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.