Court Opinion

ID: 9768239
Source: CourtListenerOpinion
Date Created: 2023-08-29 05:52:01.10916+00
Date Added: 2024-06-11T07:30:38.504644
License: Public Domain

SHANGLER, Judge,
dissenting.
The majority opinion is valid as a didactic statement of legal principle but not as a decision of the dispute presented by the parties. It assumes a state of facts which does not describe the commercial reality of the transaction, and hence reaches a mistaken end.
The transaction was a lease-purchase of an electronic system to automate a radio station owned by King Louie International. The equipment was purchased from International Good Music, manufacturer, after survey of other products on the market and on assurances of suitability for the intended use. King Louie and IGM concluded a five-year lease of the equipment with the option at the end of the term for purchase of the system by King Louie on the payment of One Dollar. Within weeks, IGM solicited International Financing, Inc., a lease-broker, to finance the transaction. International Financing, Inc. found Funding Systems Leasing Corporation for that purpose. Funding Systems was a financer of leases of equipment in general and not a buyer and seller of goods, as such. Funding Sys-*638terns approved the King Louie credit and by separate instrument concluded a five-year lease agreement [later modified to allow the One Dollar purchase option at the end of the lease term] of the electronic broadcast system. The equipment was installed but never functioned as a system nor performed dependably. The product was so faulty that the installation was finally abandoned and the radio station reverted to manual operation. Intermedia [successor to King Louie as owner of the radio station] refused to make further payment to Chase Manhattan Bank [assignee of Funding Systems]. Funding Systems sued King Louie to recover the balance of the lease-purchase obligation. King Louie sought recission and restitution for misrepresentation and breach of warranty against Funding Systems as a transactor in goods — on the assertion the disclaimer of warranty in the lease-purchase instrument was unconscionable within § 400.2-302 of the Uniform Commercial Code and so not entitled to effect. King Louie also proceeded against IGM for breach of warranty. The trial court denied remedy against Funding Systems and granted only partial remedy against IGM— by then in liquidation.
The majority judgment rests on premises of fact and law that the lease was merely a device to finance the debt for the equipment purchase and so not a transaction in goods within the scope of Article 2 on Sales of the Uniform Commercial Code [§§ 400.2-101 et seq.; § 400.2-104]. I conclude, rather, that although in the form of a financing transaction, the lease was actually a sale of goods by Systems Leasing, so that the un-conscionability and warranty provisions of the statute apply and must be given effect.
The past decade has seen a new economic use burgeon for an old commercial device: the equipment lease.1 The fresh popularity results from tax laws and accounting procedures which allow a businessman to acquire new goods through a lease and also enjoy the advantage of an accelerated depreciation.2 The usual terms of such a lease commit the lessee to a noncancellable obligation for the use of the property for its entire economic life. The lessee pays the full market price with an option to purchase and the lessor recoups the investment with interest. The advantage to the lessee is the conservation of capital outlay and preservation of credit capacity and the advantage to the lessor is a profit without the warranty impediments which encumber a seller.
The lease thus had become a useful method to finance equipment. A third-party lease system has evolved for that very purpose. Under this arrangement the lessor purchases the equipment from a supplier for the specific purpose to fill the need of the lessee. The article is shipped directly to the lessee without manipulation by the lessor. The lease — whereby the lessor recaptures the cost with interest and the property vests in the lessee at the end of the term — becomes indistinguishable from a sale. A true finance lease is a transaction in money and not in goods by a financier and not a seller. The finance lessor, by the usual terms of the transaction, assumes no responsibility for the selection, suitability, or performance of the equipment. Thus, the true lease financer does not sell nor undertake to transact in goods — but only to finance their use.3
The majority opinion sees the lease-purchase transaction as a classic three-party financing arrangement, contemplated as such between King Louie and IGM “from the very beginning,” and confirmed “[v]ery tellingly [by] the timing of the various steps” into final integration of the equip*639ment agreement between King Louie and Funding Systems. That premise, once adopted, leads inexorably to the majority result — for in such case, the transaction would be in money, not goods [§ 400.2-104(1) & (2)], no warranty would attend [§ 400.2-314], King Louie would be without status to claim unconscionability [§ 400.2-302(2)] or other remedy open to a buyer of goods. It is a premise, however, the evidence, under scrutiny, does not allow.
The evidential ground for decision rests on the ultimate conclusion — in the terms of the opinion — that
“[t]he parties here from the outset contemplated the very . . . kind of third party lease-financing which has become a familiar and much used device in American business . . . King Louie knew from the beginning that the financing would be by a third party.”
This premise, in turn, derives from other inferences of fact and interpolations the opinion postulates:

The lack of facility by IGM to finance the transaction.

“IGM did not have any facilities for carrying the financing of the lease agreement itself. Its general practice with respect to such lease-purchase arrangements was to utilize the services of a finance broker.”
The transaction among King Louie, IGM and Funding Systems was concurrent. “At the very same time that IGM sent its Equipment Proposal to King Louie, it concurrently wrote to International Financing to get the third-party financing under way. International Financing then very promptly got in touch with King Louie to request the necessary forms signed which would have to be submitted to the financing company, and International Financing did very promptly proceed to submit the proposed transaction for approval to Funding Systems. Funding Systems without any delay then in its turn submitted its documents to King Louie, and negotiations immediately ensued between Funding Systems and [King Louie attorney Rich] with respect to the financing terms. Those discussions were memorialized by written correspondence between Funding Systems and Rich as early as April 24,1970. The lease agreement itself soon followed on May 7, 1970 . .

The negotiations between King Louie attorney Rich and Funding Systems.

“Rich in his deposition which was introduced into evidence [testified]:
‘We originally started out thinking that IGM was going to carry the paper itself, as I recall, there was some conversation, with a sibling company or subsidiary company that purported to be in the leasing or financing business. We didn’t care how IGM chose to finance their arrangements so long as it didn’t make any difference in our arrangements with them.’ [Emphasis added].”
On the full evidence, these inferences are frangible, and do not prove a three-party transaction. The full evidence proves, rather, a straightforward, consummated two-party equipment lease-purchase between King Louie and IGM which Funding Systems then adopted and assumed from IGM.
The ground of the majority opinion that the parties contemplated, and King Louie knew from the first, that the purchase would be financed by a third party, is not compatible with the history of the transaction: On March 30, 1970, and April 1, 1970, King Louie agreed to two orders for the lease-purchase of electronic equipment from IGM, the manufacturer. The term was for five years at a specified monthly sum with the option at the end of the term for purchase of the system by King Louie on the payment of One Dollar. The order form called for a cash balance to be paid the manufacturer within thirty days after shipment and three advance monthly payments, which King Louie duly remitted to IGM within the week. Each equipment order form provided for payment to IGM, that title to and right to possession of the goods remained in IGM until full purchase was paid, and that the goods carried full warranty for one year. Within days, some of the equipment was delivered by IGM, but to *640a mistaken site. The sale was preceded by an IGM request for fiscal references, which King Louie supplied. There was no suggestion in the letters of any other purpose than to satisfy IGM that King Louie was fiscally responsible for the obligation between them. Nor was there any suggestion in the order forms for the equipment of a contemplated assignment of the obligation to IGM or other variance of the payee. These are significant indicia of a two-party contract to which the majority opinion gives no account.
It was in this posture of a sale, concluded as to every essential term, as well as delivery in part, that IGM — without the knowledge or concurrence of King Louie [unless we must infer, as does the majority, foreknowledge of such a design from the bare request for credit information] that IGM solicited International Financing, Inc., the lease broker for Funding Systems. It is so, that thereafter King Louie executed forms which culminated in the lease-purchase agreement with Funding Systems, but as becomes evident, although that transaction was sequential to the IGM — King Louie equipment purchase, it was not integral to that completed commercial event. The forms presented by Funding Systems were subscribed by King Louie, as it appears, as nothing more than a convenience for IGM since the terms for deferred payment for the equipment had already been concluded between IGM, the manufacturer, and King Louie, the purchaser. The Funding Systems transaction was independent of the original purchase contract, without benefit to King Louie and with benefit for IGM and Funding Systems only. It represented a purchase by Funding Systems of the obligation owed IGM by King Louie and a concomitant assumption of obligation owed King Louie by IGM. In legal effect, Funding Systems was to IGM an assignee and to King Louie a surrogate seller — with all attendant obligations of warranty, good faith and conscionability such a transaction imports. [Sections 400.1-201(19); 400.2-302; 400.2-314; Fairfield Lease Corp. v. Umberto, 7 U.C.C.Rep.Serv. 1181 (1970)].4
The subpremise of the majority opinion that the IGM lack of facility to finance the sale of its costly equipment and its general use of a broker to finance lease sales tend to prove that “King Louie knew from the outset that the financing would be by a third party” does not follow logically. The preliminary exchanges between IGM and King Louie give no intimation of a third party to the contract. The letters in exchange between them, the IGM equipment proposal forms by which the goods were ordered, the acceptance of the proposals— none of them suggests any terms of sale additional to those adopted between them nor any party in interest other than themselves. Funding Systems, to reiterate, came to a sale already agreed and completed to which it was not privy. On elementary principles of contract law, King Louie cannot be bound to knowledge of terms of contract without assent. Pink v. American Surety Co. of New York, 283 N.Y. 290, 28 N.E.2d 842, 845[7] (1940); Williston on Contracts, § 648 (3d ed.).
Nor does another subpremise of the majority opinion — that “King Louie was fully familiar with the usual methods of lease-purchasing [and] had made all of its major acquisitions [except real estate] by lease-purchase arrangement for at least the past 15 years” add any more logic to the conclusion that King Louie on that account, and on account of the general practice to finance lease purchases by IGM, expected a third-party transaction. This evidence, derived from King Louie attorney Rich, establishes merely that King Louie used the lease-purchase device for its costly plant acquisitions — no doubt, as a mode of accelerated depreciation and tax advantage. That evidence does not say, or even suggest, that these habitual purchases were other than by a two-party transaction, to which the lease-purchase device lends itself as readily as to a third-party transaction — as, for instance, where the manufacturer has the capacity for deferred payment transactions or the lessee-purchaser has sufficient *641capital resources for outlay. The distinction is critical: the two-party lease-purchase is a transaction in goods analogous to a sale, and so within the protections of Article 2 of the Code [Owens v. Patent Scaffolding Co., 11 Misc.2d 992, 354 N.Y.S.2d 778, 780[3, 4] (1974)] while a true third-party arrangement merely finances the purchase debt and so is a transaction in money unattended by obligation of warranty or conscionability of contract. [Leasco Data Processing Equipment Corp. v. Starline Overseas Corp., 74 Misc.2d 898, 346 N.Y.S.2d 288 (1973); Note, Warranties in the Leasing of Goods, Ohio State L.J., Vol. 31, p. 140, 1. c. 144 et seq. (1970)]. The insistence by attorney Rich that there be no surrender of warranty to Funding Systems [related in fuller context shortly] implies a practice by King Louie to two-party lease-purchases whereby the merchantability and fitness for use of the costly equipment were ensured by warranty. In further proof that debt finance was not, in fact, the object for subscription to the Funding Systems proposals, the forms were modified to conform with the purchase option provision for One Dollar at the end of the lease term and — so attorney Rich assumed — to preserve the warranty.
The remainder subpremise of the majority opinion attempts to prove, by a fragment of the testimony of King Louie attorney Rich, that he understood by the negotiations with Funding Systems that the lease purchase was a three-party transaction. The evidence takes on a completely different aspect, however, in the full context of testimony. The subject of the inquiry was the terms of the lease-purchase documents used to order the equipment from IGM.
ON DIRECT EXAMINATION:
Q. Was this an arrangement and the understanding as you counseled with your client at the time the equipment was purchased?
A. Absolutely. Not only my client but with the plaintiffs [Funding Systems] in this lawsuit .
Q. All right. Now, at some subsequent time did you have any contact with one who subsequently purchased this equipment for sale to King Louie International, Inc.?
A. Yes, sir.
Q. And with whom did you have subsequent contact, Mr. Rich?
A. I cannot presently recall his name. It was a fellow at Funding Systems.
******
Q. All right. Now, you mentioned a moment ago that in your counseling and in the purchase of this equipment it was on a lease purchase arrangement, is that correct ?
A. Yes, sir.
Q. Is there some significance to that so far as warranties concerning the material is concerned?
A. Well, we had warranties, sure, warranties of fitness under the code and the contract, referring now to the proposals which were accepted and which IGM always acknowledged as a completed deal, contained warranties by their terms as well as the warranties that are contained in commercial transactions under the U.C.C.
Q. Was it your opinion, as the counsel for King Louie International, Inc., that the matter as arrived at and consummated with International Good Music contained the usual warranties of merchantability and fitness for the purpose it was manufactured?
A. Absolutely.
Q. Now, I would ask you this: In your conversations that you had with Mr. Larson of Funding Systems, was there ever any discussion that the transaction with them would be any different so far as these warranties were concerned?
A. Absolutely not.
Q. Was there any conversation with him concerning the understanding that the purchase arrangement with Funding Systems was to be the same *642as it was with Internationa] Good Music?
A. There was, yeah.
Q. And what was that conversation?
from our point of view. We originally started out thinking that IGM was going to carry this paper itself, as I recall, there was some conversation, with a sibling company or subsidiary company that purported to be in the leasing or financing business. We didn’t care how IGM chose to finance their arrangements so long as it didn’t make any difference in our arrangements with them. A. The understanding was that Funding Systems were going to understand— were adopting the deal with IGM
Q. Was there ever any understanding or conversation with anyone in Funding Systems Leasing Corporation that this equipment as enumerated and identified on Exhibits 1 and 2 was to be simply leased and all warranties surrendered?
A. Of course not. Correspondence shows that.
******
Q. Did you ever review or forward to Mr. Lerner [Executive officer of King Louie] for execution any document by which this equipment was leased rather than lease purchased and by which all warranties were surrendered?
A. No, sir.
******
Q. All right, sir. To your knowledge was there ever any understanding that any agreement would be reached by which this equipment would be leased or purchased surrendering and forfeiting all warranties of fitness merchantability?
A. Certainly, no, sir.
******
Q. Did Funding Systems, in any of your communications with them, ever indicate that the arrangement by which this equipment was sold or lease purchased to King Louie was under any different arrangement than that which had been made with Interna-tionalf?]
******
Not prior to the time that we advised Funding Systems that the company, King Louie, was not going to pay for the equipment. Prior to that time they assured us that the deal was exactly the same, that they were just stepping into the shoes of IGM. A.
Q. All right.
A. Thereafter—
Q. You learned that there was a different contention made?
A. Absolutely.
******
Q. All right. I’ll ask you, was there ever any intent or any understanding or agreement that this equipment would be leased or lease purchased by an arrangement which would forfeit all warranties of fitness, warranties of merchantability, and forfeiting of equipment at the end of the term and forfeiting all payments?
A. Absolutely not. There was never with anybody at any time prior to the institution of this lawsuit any conversation, correspondence, or otherwise, which I am aware of, that had — made reference to any leasing that wasn’t a lease purchase plan, because they don’t do business that way, never have and certainly there was never any remission without consideration of our warranties. [Emphasis supplied.]
******
The insistent testimony of attorney Rich, stated and restated, that the transaction intended was between manufacturer IGM and purchaser King Louie with the full warranty contemplated for a sales transaction under the Code was merely reaffirmment.
*643ON CROSS-EXAMINATION:
Q. When was the first time that you became aware that King Louie International, Inc., had leased equipment from Funding Systems Leasing Corporation?

******

A. My understanding was that that lease arrangement was a lease arrangement we had made with IGM, which was a walk away lease, or abandon lease, for one dollar, at the termination of a period of time, a certain number of payments with full warranties as set out in the—
******
Q. Is it your testimony that James Larson indicated to you that Funding Systems Leasing Corporation was extending warranties to King Louie International, Inc., with reference to this equipment?
A. It is my understanding, from Larson, that they were standing in the shoes of IGM. Whatever the arrangements we made with IGM they were just purchasing the equipment from IGM and making the same arrangement with us; yes, that is my understanding.
Q. And that arrangement was what?
A. And that arrangement was a lease purchase of this automated equipment, whatever it was, to be financed through the lease device and purchased at the end of a particular term and that the equipment, of course, would have the normal warranties and fitness for service.

******

Q. Other than that document do you know of any other written agreement under which King Louie International, Inc., would have paid Funding Systems Leasing Corporation moneys totalling approximately twenty thousand dollars?
A. Well, I think there was — there may have been some agreement, some assignment between IGM and Funding Systems that I know nothing about and had direction to pay Funding Systems, but I know of no other document.
Q. Do you know of any assignment from IGM to Funding Systems Leasing?
A. No, sir.
Q. Do you know of any connection between IGM and Funding Systems Leasing?
A. Well, I know that there had to be some kind of commercial relationship as far as this transaction was concerned, but other than that I have no knowledge.
Q. And upon what do you base that assumption?
A. We made a deal with IGM, okay, the next thing I know I’m hearing from Funding Systems, so I would assume that there was some privity there, although perhaps I should not make that assumption.
[Emphasis supplied.]
This extended evidence, unnoticed by the majority opinion, means quite plainly that King Louie understood the transaction as a direct two-party lease-purchase of the equipment attended with warranties of sale. This evidence means also that by signature to the Funding Systems forms King Louie meant only to accept another seller “in the shoes of IGM” and, whatever else, to preserve the express warranties given by the documents of sale with IGM, as well as the warranties implied by law under the Code. This evidence implies clearly, also, that the usual lease-purchase practice used by King Louie was of the two-party kind and that King Louie fully excepted the transaction with IGM was of that kindred, protected by warranty and unaffected by the substitution of Funding Systems as seller by assignment.
In the full context of testimony, the solitary fragment of Rich testimony cited by the majority opinion
[w]e didn’t care how IGM chose to finance their arrangements so long as it didn’t make any difference in our arrangements with them.
*644does not allow the inference the majority draws — that King Louie understood from the first the transaction would entail a third-party financer — but rather, that King Louie was indifferent to whatever the overture by IGM to Funding Systems brought to the sales transaction between King Louie and IGM except that the sales warranties be unaffected.
Finally, the testimony of attorney Rich asserts what the other evidence fairly shows — and the trial court expressly found5 —that the sale between King Louie and IGM was concluded before IGM [for whatever reason] solicited the intercession of Funding Systems into the transaction.
The evidence entirely, the post-sale letter exchanges among King Louie, Funding Systems and assignee Chase Manhattan Bank included, shows a lease-purchase fully concluded between King Louie and IGM as the true transaction into which IGM solicited Funding Systems to intervene by purchase of the deferred payment obligation owed IGM by King Louie. Accordingly, IGM was a lessor-seller of goods and, on basic principles of the law of assignments, Funding Systems succeeded to the obligations for warranty, fair dealing and conscionability of contract that accrued to King Louie under the original terms of sale — unless, of course, relinquished thereafter by King Louie. Restatement of Contracts, § 167 (1934); Corbin on Contracts, § 892 (1951); Fritch & Reisman, Equipment Leasing— Leveraged Leasing, p. 617.
Funding Systems, thus, was successor to the status as lessor-seller of goods to King Louie, and as such, by established New York law, was governed by Article 2 on Sales which — by definition — applies to transactions in goods. The policy which treats a lease of equipment as concluded by King Louie as a simulated sale — and thus a transaction in goods — rests on the rationale that [Hertz Commercial Leasing Corp. v. Transportation Credit Clearing House, 59 Misc.2d 226, 298 N.Y.S.2d 392 (1969), rev’d on other grounds, 64 Misc.2d 910, 316 N.Y. S.2d 585 (1970), l. c. 298 N.Y.S.2d at 395]
[in] view of the great volume of commercial transactions which are entered into by the device of a lease, rather than a sale, it would be anomalous if this large body of commercial transactions were subject to different rules of law than other commercial transactions which tend to the identical economic result.6
*645It is the augury of this principle that an entrepreneur who seeks the advantage of a seller — whatever form the transaction— must bear the obligations of a seller. It is the contention of King Louie that since the transaction with Funding Systems was actually a sale, that plaintiff warranted the merchantability and fitness for use of the equipment and is answerable for their breach. The circumstances of this transaction dispel the contention by Funding Systems that it was merely a finance lessor and so not amenable to Article 2 on Sales, but Funding Systems contends, notwithstanding, if warranties attended the transaction they were disclaimed by the conspicuous writing of exclusion required by § 400.2-316 contained in the agreement. King Louie responds, all else notwithstanding, that the lease agreement was unconscionable within the terms of § 400.2-302.
It remains only to decide whether the terms of surrender of warranty and defenses of the form contract between King Louie and Funding Systems was by conscionable assent.
The form contract submitted by Systems Leasing and subscribed by King Louie was unconscionable and should not be enforced. Unconscionability does not displace freedom of contract in commercial transactions. Rather, freedom of contract is made a principle of the Code by § 400.1-102(3) that “[t]he effect of provisions of this [Act] may be varied by agreement.” [U.C.C. Comment 2]. That principle, however, is subject to the specific exceptions of that section that the parties may not disclaim the obligations of good faith and reasonableness prescribed by the Code. Although not dubbed in those terms, the authorities agree that another obligation under the Code which may not be varied or avoided by agreement is the provision of § 400.2-302 for conscionability of contract. White and Summers, Uniform Commercial Code, § 3-9 (1972); Deutch, Unfair Contracts: The Doctrine of Unconscionability (Lexington Books, 1976). Thus, the Code imposes these obligations in every contract for the sale of goods.
The doctrine of unconscionability derives from both the common law and the equity practice. The courts were reluctant to invalidate on the express ground that a particular clause or contract was unfair. Out of a regard for “freedom of contract” they used formal devices of construction and other covert methods to accomplish that pur*646pose. It was the intention of the draftsmen of the Code that the courts have a broad equitable tool to attack the unconscionable features of a contract directly and openly. Spanogle, Analyzing Unconscionability Problems, 117 U.Pa.L.Rev. 931, 937 (1969); § 400.2-302 [U.C.C. Comment 1]. One of the principal uses of the unconscionability doctrine has been to subject form contracts to scrutiny to determine the assent actually given to the printed terms. The most frequent beneficiaries of unconscionability § 400.2-302 have been poor, illiterate and otherwise disadvantaged consumers [Jefferson Credit Corp. v. Marcano, 60 Misc.2d 138, 302 N.Y.S.2d 390 (1969) and other cases cited in White and Summers, supra, § 4-3, n. 28], but [contrary to the majority contention] the courts have become increasingly aware that the principle applies fairly between businessmen and corporations as well. Electronics Corp. of America v. Lear Jet Corp., 55 Misc.2d 1066, 286 N.Y.S.2d 711 (1967); United States Leasing Corp. v. Franklin Plaza Apts., 65 Misc.2d 992, 319 N.Y.S.2d 531 (1971).
The lease between Funding Systems and King Louie is a form contract drafted and supplied by Funding Systems. The only inserted terms are the names and addresses of the lessee [King Louie] and of the supplier of the equipment [IGM], the quantity and description of the goods, and the terms of payment. The rest of the lease consists of Terms and Conditions stated in twenty-six numbered paragraphs, all, except for paragraph three, in inconspicuous print.
Paragraph three is headed: NOTICE OF INTENDED ASSIGNMENT: NO WARRANTIES BY LESSOR OR LESSOR’S SUCCESSOR OR ASSIGNEE; MAINTENANCE, COMPLIANCE WITH LAWS. Then follows in fine print acknowledgment by lessee that lessor intends to assign the lease and the agreement of lessee not to assert against the assignee any defense, set-off or claim lessee may have against the lessor which arises “under this lease or any other transaction or otherwise.” Then in boldface red print [as an ostensible compliance with § 400.2-316 for exclusion of implied warranties], paragraph three continues to recite:
THAT THE LESSEE REPRESENTS THAT LESSEE HAS SELECTED THE EQUIPMENT LEASED HEREUNDER PRIOR TO HAVING REQUESTED THE LESSOR TO PURCHASE THE SAME FOR LEASING TO THE LESSEE, AND LESSEE AGREES THAT THE LESSOR HAS MADE AND MAKES NO REPRESENTATIONS OR WARRANTIES OF WHATSOEVER NATURE, DIRECTLY OR INDIRECTLY, EXPRESS OR IMPLIED, AS TO THE SUITABILITY, DURABILITY, FITNESS FOR USE, MERCHANTABILITY, CONDITION, QUALITY, OR OTHERWISE OF ANY SUCH UNIT. LESSEE SPECIFICALLY WAIVES ALL RIGHTS TO MAKE CLAIM AGAINST THE LESSOR HEREIN FOR BREACH OF ANY WARRANTY OF ANY KIND WHATSOEVER AND AS TO LESSOR, OR LESSOR’S ASSIGNEE, LESSEE LEASES THE EQUIPMENT “AS IS.” LESSOR AND LESSOR’S ASSIGNEE SHALL NOT BE LIABLE TO LESSEE FOR ANY LOSS, DAMAGE OR EXPENSE OF ANY KIND OR NATURE CAUSED DIRECTLY OR INDIRECTLY BY ANY UNIT LEASE HEREUNDER OR THE USE OR MAINTENANCE THEREOF OR THE FAILURE OF OPERATION THEREOF, OR THE REPAIRS, SERVICE OR ADJUSTMENT THERETO, OR BY ANY DELAY OR FAILURE TO PROVIDE ANY THEREOF, OR BY ANY INTERRUPTION OF SERVICE OR LOSS OR USE THEREOF OR FOR ANY LOSS OF BUSINESS OR DAMAGE WHATSOEVER AND HOWSOEVER CAUSED.
The paragraph resumes in fine print to recite that neither the lessor nor assignee has any obligation to install, adjust or service the equipment; that lessee has the expense of the operation, repairs and maintenance of the equipment; and that no defect relieves lessee of the obligation for payment under the lease.
Paragraph three, in sum, is the agreement of lessee [King Louie] to waive asser*647tion of any defense or claim against the assignee lessee may have against lessor [Funding Systems] under any transaction; the agreement to exclude from the transaction implied warranties of merchantability and fitness for use of the equipment; assumption by lessee of all loss from failure of the equipment and for consequential damage by business interruption or otherwise; the assumption by lessee of the cost of repair and maintenance of the equipment; and acknowledgment by lessee of the absolute obligation to pay for the equipment.
Paragraph four reiterates that the lessor shall not be liable for damage from any cause and requires the lessee to inspect the equipment within three business days of delivery, after which in the absence of complaint, lessee would be conclusively presumed to have received the equipment in a condition compliant with the agreement.
Paragraph eleven allows the lessor to assign the lease without notice or consent of lessee and repeats that the obligations of the lease shall not be subject to any claim or defense available to the lessee against the lessor.
Paragraph twelve provides that failure of lessee to pay any installment shall constitute default and accelerate the balance due under the lease as liquidated damages.
Paragraph thirteen provides that the lessee shall have no option to purchase or otherwise acquire ownership of the equipment.
Paragraph fifteen renders the remedies of the lessor cumulative and not exclusive.
Paragraph sixteen renders the lease irrevocable.
Paragraph twenty-one is a waiver by the lessee of trial by jury and interposition of counterclaim or setoff against the lessor in any litigation on the lease.
Paragraph twenty-two agrees that the lease is a contract under New York law and chooses the law of that state to determine the rights and duties of the parties.
The lease was executed by King Louie on May 7, 1970, but prior to that date, two terms of the form were modified by correspondence: an option to purchase was added upon payment by the lessee of $1 at the end of the lease term [a modification of paragraph thirteen] and the time for acceptance of the equipment was advanced from three to ten days [a modification of paragraph four].
A separate but related LESSEE’S ACKNOWLEDGMENT & DELIVERY ACCEPTANCE RECEIPT was executed by King Louie concurrently with the subscription to the lease. That paper acknowledged receipt of the merchandise in good condition although, as found by the trial court and shown by evidence, delivery was not actually made until at least the end of that May.7
It is the contention of King Louie that a contract whereby a lessor-seller disclaims all liability from useless goods yet holds a lessee-buyer to an absolute noncancellable obligation to pay for them is unconscionable within § 400.2-302 and should not be enforced.
Section 400.2-302 provides:
(1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause so as to avoid any unconscionable result.
(2) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the par*648ties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.
The term unconscionability comes without definition but not without meaning. “The principle is one of the prevention of oppression and unfair surprise and not of disturbance of allocation of risks because of superior bargaining power.” [§ 400.2-302, U.C.C. Comment 1]. The elements unfair surprise and oppression have been translated by commentators,8 and accepted by the courts [and the majority opinion], as a distinction between procedural and substantive unconscionability. Procedural unconscionability refers to abuse in the contract formation process and substantive unconscionability refers to resultant harsh and unreasonable terms of contract.9 In these terms, unconscionability does not interfere with freedom of contract, but redresses unfair results from the lack of free assent to the terms of agreement. Industralease Automated & Scientific Eq. Corp. v. R.M.E. Enterprises, Inc., supra, l. c. 431, Williams v. Walker-Thomas Furniture Co., 350 F.2d 445, 449 (U.S.App.D.C.1965).
Although unconscionability § 400.2-302 applies to all contracts, the statute is the particular response of the Code to the inability of the traditional law to deal with the unfairness of form contracts — most pertinent here. On conventional rules, a consumer who signs a form prepared by a seller or lender thereby manifests intent to be bound by all its terms — even though he had not read them and could neither understand nor change them if he had. It was the insight of Llewellyn, chief architect and draftsman of § 400.2-302, that the traditional doctrine that a signature manifests assent overlooks the special nature of a form contract. Llewellyn saw in every standard form contract two separate agreements: one agreement from the terms actually bargained and specifically given assent by the nondrafter and the other agreement from the boilerplate, rote, nonnegoti-ated and, almost certainly, unread terms of the printed form. [K. Llewellyn, The Common Law Tradition, 370-371 (I960)]:
Instead of thinking about “assent” to boiler-plate clauses, we can recognize so far as concerns the specific, there is no assent at all. What has in fact been assented to specifically are the few dickered terms, and the broad type of the transaction, and but one thing more; that thing more is a blanket assent [not a specific assent] to any not unreasonable or indecent terms the seller may have on his form, which do not alter or eviscerate the reasonable meaning of the dickered terms. The fine print which has not been read has no business to cut under the reasonable meaning of those dickered which constitute the dominant and only real expression of agreement.
Thus, the assent given to the printed terms of a form contract — by consumers and businessmen alike — is limited by the common understanding of the parties that: first, the form terms may not alter the negotiated terms and, second, the rote clauses may not be unreasonable singly or in total effect. Spanogle, Analyzing Un-conscionability Problems, 117 U.Pa.L.Rev. 931, 940 (1969). When a form contradicts *649these basic expectations by terms grossly imbalanced in favor of the drafter then “the rule that a man is presumed to have agreed to what he signs [apt enough when two solicitors have wrestled over an individual deal] runs at flat variance with the facts of life and with the facts of printed form pads.” Llewellyn, Common Law Reform of Consideration: Are There Measures?, 41 Colum.L.Rev. 863, 869-870 (1941). This principle of unconscionability [§ 400.2-302] that unfair hidden clauses do not bind the nondrafter has been continued in Restatement (Second) of Contracts, § 237, Comments b and c (1973), in 1A Corbin on Contracts, § 33, p. 131 (1963), in the comments of academicians and in the case law. Calamari, Duty to Read — A Changing Concept, 43 Fordham L.Rev. 341 (1974).
The determination of unconscionability in a particular case is one of law for the court and by the express terms of the statute and must be made on evidence of the “commercial setting, purpose and effect” of the transaction. Zicari v. Joseph Harris Co., 33 App.Div.2d 17, 304 N.Y.S.2d 918, 935 (1969); [§ 400.2-302, U.C.C. Comment 3].10
The lease form in litigation does not describe the actual transaction between Funding Systems and King Louie. It simulates the classic three-party finance transaction to an actual two-party lease-purchase and so undertakes to force economic and legal consequences the true undertaking does not contemplate. The printed terms of the form are designed for a transaction whereby a business [King Louie] selects goods from a supplier [IGM] and solicits an entrepreneur [Funding Systems] to finance the debt by a lease device. The lessor by printed conditions of lease then undertakes to make the obligation of the lessee to pay the installments absolute and at the same time insulates itself from all liability to the lessee from the transaction. Thus, paragraph three recites in boldface red-ink print: THAT THE LESSEE REPRESENTS THAT LESSEE HAS SELECTED THE EQUIPMENT LEASED HEREUNDER PRIOR TO HAVING REQUESTED THE LESSOR TO PURCHASE THE SAME FOR LEASING TO THE LESSEE, AND LESSEE AGREES THAT THE LESSOR HAS MADE AND MAKES NO REPRESENTATIONS OR WARRANTIES OF WHATSOEVER NATURE . . . etc. In fact, as the evidence shows and the trial court found, King Louie had already concluded a five-year agreement with IGM to lease the automated broadcast system with an option to purchase the equipment at the end of the term for an additional One Dollar. It was IGM, to repeat, which over-tured Funding Systems to finance the lease-sale and the resultant agreement between Funding Systems and King Louie was for the benefit of IGM alone. Funding Systems took the relationship between IGM and King Louie as found and became a surrogate seller and conformed with the insistence by King Louie that the form contract be amended to include the same op*650tion to purchase provided by the contract terms with IGM. Whatever the terminology of the form, therefore, as between King Louie and Funding Systems, the actual transaction was that of a lease-purchase of chattels and not to finance a debt.
There were only four terms negotiated between Funding Systems and King Louie: description of the goods, terms of payment, option to purchase and extension of time for acceptance.11 The balance of the lease terms, twenty-six separate paragraph terms and conditions of lease — except for a portion of paragraph three which in conspicuous print disclaims any warranty — is a mass of fine print trivia. The form protects, in terms sometimes contradictory to the DELIVERY ACCEPTANCE RECEIPT, Funding Systems and its assignee from any claim, counterclaim, setoff, remedy or jury .trial to which the lessee may be entitled. The form recites many of these protections against the lessee from any transaction, whether or not under the lease. In short, Funding Systems undertakes to assert against King Louie all rights and to be exculpated from all liability a lessor might conceivably have against a lessee or be subject to under all circumstances however unrelated to the actual transaction. These terms are so grossly out of balance as to be beyond the reasonable expectations of the transaction. Wilson Trading Corp. v. David Ferguson, Ltd., supra; Electronic Corp. of America v. Lear Jet Corp., supra.
The basis of the bargain between IGM and King Louie and thereafter assumed by Funding Systems, was the lease-sale for an agreed price and payment of equipment that would operate as an automated broadcast system.12 These were the negotiated terms and the very root of the contract. The printed forms which deny a lessee [in this case, King Louie] to assert a defense against the lessor [a status assumed by Funding Systems] when the fundamental basis for the contract fails [a failure of consideration, in conventional terminology] and yet requires absolute obligation for full payment goes contrary to expectations of the nondrafter and in good conscience cannot be enforced. Industralease Automated & Scientific Eq. Corp. v. R.M.E. Enterprises, Inc., supra, l. c. 432; Zabriskie Chevrolet, Inc. v. Smith, 99 N.J.Super. 441, 240 A.2d 195 (1968); 6 Corbin on Contracts, §§ 1256-1257; White & Summers, Uniform Commercial Code, § 9-2.
The parties are left free under the Code to shape their remedies to their own requirements [§ 400.2-719] but even this power to limit remedies is subject to the uncon-scionability principle of § 400.2-320. “[I]t is of the very essence of a sales contract that at least minimum adequate remedies be available . . . [T]here [must] be at least a fair quantum of remedy for breach of the obligations or duties outlined in the contract . . . Thus any clause purporting to modify or limit the remedial provisions of this Article in an unconscionable manner is subject to deletion . . .” [§ 400.2-719, Comment 1]. The exculpatory provisions iterated throughout the printed lease form which deny remedy to the lessee altogether are terms not codetermined by King Louie but merely inserted by the lessor. They alter the fair meaning of the dickered terms and so subvert the basic bargain without assent of the other party to the contract. “Unconscionability arises from the inequity of compelling payment for equipment that can’t be used without the right to interpose a defense or set-off. From the point of view of the user it makes little difference that he is labeled a buyer or lessee. In either case the agreement is *651unconscionable if the user must pay for something he can’t use without the right to assert a meritorious defense or set-off.” United States Leasing Corp. v. Franklin Plaza Apts., supra.
Funding Systems contends [and the majority opinion stresses], however, that there was no unfairness in the contract formation process because there was no disparity in bargaining power between the lessor and lessee, both million-dollar corporations. Contrary to contention, however, uncon-scionability does not operate only to relieve a consumer disadvantaged by a one-sided contract induced by an imbalance of the power to bargain. The purpose of the un-conscionability section is “the prevention of oppression and unfair surprise and not of disturbance of allocation of risks because of superior bargaining power.” [§ 400.2-302, U.C.C. Comment 1, emphasis supplied.] The primary concern which prompted adoption of the unconscionability section was recognition that there was little reliance by businessmen on the force of the printed terms in the form contract transactions between them. This section undertakes to relieve the artificial rule which accords the form terms effect on principles of freedom of contract although no assent to the hidden terms was given or intended. Deutch, Unfair Contracts: The Doctrine of Unconscionability, p. 118 (Lexington Books 1977). As the citations of decisions on the U.C.C. Comments to that section signify, unconscionability relates to merchant-to-merchant transactions as well as to consumer contracts.
An imbalance in bargaining power, of itself, does not render a contract unconscionable if the result is not substantively unreasonable. Allen v. Michigan Bell Telephone Company, 18 Mich.App. 632, 171 N.W.2d 689, 692[5] (1969). In consumer contracts, the particular status of the individual — for instance, his limited knowledge of English — may contribute to the disparity and so induce intervention by the court. Jefferson Credit Corp. v. Marcano, 60 Misc.2d 138, 302 N.Y.S.2d 390 (1969). In the corporation-to-corporation transaction between Funding Systems and King Louie, however, the justification for judicial interference rests on the indisputable fact [established by the very evidence of Funding Systems] that the lessee had no choice but to accept the form terms which required full payment for the equipment yet exculpated the lessor for all liability. The lease-purchase which eventuated between Funding Systems and King Louie was placed with Funding Systems by lease-broker International Financing, Inc. at the request of IGM to finance the lease-purchase debt of the original transaction with King Louie. Larson, President of International Financing, Inc. and concurrently Regional Manager of Funding Systems, testified that the lease form used in the transaction was in the terms used by every lessor-financer of equipment in the industry. “The layout of the lease may be different, but they are virtually all the same.” He testified certainly that “no leasing company that is in general equipment leasing business . extends warranties, maintenance, merchantability of any product.” Every such lease throughout the industry contains warranty disclaimers, exculpatory clauses which limit remedies and those other terms which insulate the lessor and assignee from actions and counterclaims. The legal terminology of the equipment lease document is thus made to conform to the requirements of the large financial houses, particularly Chase Manhattan Bank and New York Chemical Bank, which are the major sources for such credit. In fact, the equipment lease form between Funding Systems and King Louie is a virtual adhesion contract which allows the nondrafter no choice as to terms. It is a contract form prepared by the industry and required in every equipment lease transaction. The printed form takes advantage of the lack of any real alternative to a lessee to impose terms which demand full payment but allows no recourse for goods which prove to be worthless. An equipment lessee has no choice but to accept a contract on the terms offered or do without the goods altogether. Such a contract is grossly one-sided and oppressive. It is manifestly unreasonable and uncon*652scionable and should not be enforced. [§§ 400.1-102(3) and 400.2-302].
The eases discoursed prominently by the majority opinion, Leasco Data Proc. Equip. Corp. v. Starline Overseas Corp., supra, and In re Sherwood Diversified Services, Inc., 382 F.Supp. 1359 (S.D.N.Y.1974) do not contradict the conclusion of this dissent. Neither decision involves, as does this case, a form contract which does not describe the actual transaction. Rather, each describes a true finance lease contemplated and assented to as such. In each case the purchaser-lessee designated the equipment which was then purchased by the finance-lessor at the actual request of the lessee —as the Funding Systems-King Louie agreement simulates but does not do.
The majority opinion shows concern that to hold the form contract unconscionable would undermine finance-lease transactions and unsettle a useful commercial device. The majority expresses also that the disclaimer of warranty as a reasonable device for a debt financer is proved by its universal currency in the commercial world. A true finance-lessor has no cause for unease because such activity, by definition, is transaction in money and so beyond the scope of the warranty provisions of Article 2 on Sales. Had the event described in the form agreement between Funding Systems and King Louie reflected an actuality, King Louie would have no basis for the claims for warranty and defenses it now asserts. I have no cause to doubt that Funding Systems was in the business to finance equipment leases and not to sell goods and comported in all other instances as a transactor in money beyond the scope of Article 2 on Sales. I say only that as to this transaction and this set of circumstances Funding Systems acted the role of a seller and so owes King Louie the duty of a merchant under the Code.13 The duty of a court is to refuse an unconscionable sale by rescission of contract, enforcement of warranty, or other remedy to restore the contractors to status quo.
For these reasons, I dissent.

.Fortune, November, 1976, p. 50 reports that equipment leases accounted for a full 15% of all capita] outlays for 1975. The dollar volume, between $50 to $80 billion for that industry, was forecast to increase to $150 billion by the end of 1980. Comparable reports are found in Forbes, January 15, 1975, p. 42, and Iron Age, July 12, 1976, p. 27.

. Wyatt, Accounting for Leases, II, 1972 U.Ill. L.F. 497; Coogan, Leases of Equipment and Some Other Unconventional Security Devises, 1973 Duke L.J. 909, 912, n. 5.

. Hawkland, The Impact of the Uniform Commercial Code on Equipment Leasing, 1972 U.Ill. L.F. 446, 449.

. The lease, by its terms, adopts New York law to define the rights and liabilities of the parties.

.The Findings of Fact, one through nine, also unnoticed by the majority opinion recite:
1. In March and April of 1970, and for several years prior thereto, the Third Party Defendant, International Good Music, Inc. (hereinafter referred to as IGM) engaged in the business of manufacturing radio automation systems.
2. In March and April of 1970, and for a period of time prior thereto, King Louie International, Inc. (hereinafter referred to as King Louie) owned Radio Station KBEA and was desirous of purchasing a radio automation system.
3. In April of 1970, King Louie entered into an agreement with IGM to lease-purchase an IGM 630 system. This agreement was embodied in written proposals numbered 7408 and 7420 signed by representatives of the parties.
4. IGM represented that the 630 automation equipment would automate the operation of Station KBEA including accurate timing of programmed events such as commercials, features, music, news and hourly and semi-hourly joining of affiliate network stations.
5. Warranties of merchantability and fitness for the particular purpose for which manufactured as provided in the Uniform Commercial Code were not excluded in the proposals.
6. Relying on the representations and the skill and judgment of IGM, King Louie forwarded its check in the amount of $3,214.44 to IGM as the first and last two payments as required by proposals 7408 and 7420.
7. IGM accepted the check as payment of the first and last two payments as evidenced by a letter dated May 10, 1970, signed by Rogan Jones, President of IGM.
8. Sometime in March or April, 1970, IGM contacted a ‘lease-brokerage’ firm named International Financing Incorporated which in turn contacted the plaintiff, Funding Systems Leasing Corporation regarding sale to Funding Systems of the same automation equipment herein involved.
9. Funding Systems thereafter, on or about April 1st, 1970, bought the automation equipment as set out in Lease No. 0403083, with the warranties and guaranties extended to any buyer under the Uniform Commercial Code.

.The majority unfairly disparages the authority of Hertz as precedent to treat a sale guised as a lease of equipment as a sale nonetheless— and therefore a transaction in goods within the *645operation of Article 2 of the Code. The comment at note 4 of the majority opinion not only misconstrues the appellate disposition of Hertz but overlooks the pervasive authority of the lower Civil Court rationale in subsequent decisions — not only by the New York courts, but in other jurisdictions. The perception of the majority that Hertz can be of no value as a precedent because the appellate decision which reversed Hertz determined that “the Civil Court should not have reached the questions of law regarding the application of U.C.C. Article 2, thereby in effect vacating that part of the Civil Court opinion relied on by King Louie” is simply mistaken. Hertz was reversed on a ground of procedure, but the appellate decision left the substantive declarations of the Civil Court intact. That continued validity in New York is shown by at least six court decisions, the appellate term among them, which have since cited the original Hertz opinion with approval. See, for instance, Owens v. Patent Scaffolding Co., 77 Misc.2d 992, 354 N.Y.S.2d 778, 781 (1974); Fairfield Lease Corp. v. George Umbrella Co., Inc., 8 U.C.C. 184 (N.Y.Civ.Ct.1970); Granite Equipment Leasing Corp. v. Everett School, Inc., 9 U.C.C. 849 (N.Y.Civ.Ct.1971); Industralease Automated & Scientific Eq. Corp. v. R.M.E. Enterprises, Inc., 58 A.D.2d 482, 396 N.Y.S.2d 427, 430 (1977) [cited prominently for other purposes by the majority opinion]. The influence of the original Hertz decision continues beyond the immediate forum: Mays v. Citizens & Southern National Bank, 132 Ga.App. 602, 208 S.E.2d 614 (1974); May Co. v. Trusnik, 54 Ohio App.2d 71, 375 N.E.2d 72 (1977); Walter E. Heller v. Convalescent Home, 49 Ill.App.3d 213, 8 Ill.Dec. 823, 365 N.E.2d 1285 (1977); Atlas Industries, Inc. v. National Cash Register Co., 216 Kan. 213, 531 P.2d 41 (1975) [cited for other purposes by the majority opinion]; A-Leet Leasing Corp. v. Kingshead Corp., 150 N.J.Super. 384, 375 A.2d 1208 (1977); C & J Fert., Inc. v. Allied Mut. Ins. Co., 227 N.W.2d 169 (Iowa 1975), and others. These cases cite the precise declaration this dissent adopts as precedent. It is sufficient to conclude that Hertz has also prompted numerous law review comments and critiques and is cited recurrently in the new publication, Equipment Leasing— Leveraged Leasing, edited by Fritch and Reis-man, as a leading and significant case in commercial law.

. The RECEIPT iterated again the agreements of paragraphs three and eleven of intention by lessor to assign and the promise of lessee to pay to the assignee the obligation under the contract notwithstanding any defense, setoff or1 counterclaim available against lessor with the proviso that “the Lessee reserv(es) its right to have recourse directly against the Lessor on account of any such defense, set-off or counterclaim” — in clear contradiction of the terms of paragraph twenty-one which recites the waiver of the lessee of all remedies against the lessor under the lease.

. Leff, Unconscionability and The Code — The Emperor’s New Clause, 115 U.Pa.L.Rev. 485, 498 et seq. (1967); Spanogle, supra; White & Summers, supra, § 4-2, pp. 117 et seq.

. The most common species of procedural un-conscionability is the unfairness which results from inequality of bargaining power — as by a merchant who sells by a form contract in English, a language not understandable to the consumer [Frostifresh Corp. v. Reynoso, 52 Misc.2d 26, 274 N.Y.S.2d 757 (1966), rev’d on other grounds, 54 Misc.2d 119, 281 N.Y.S.2d 964 (1967)—and the lack of a meaningful choice, Jones v. Star Credit Corp., 59 Misc.2d 189, 298 N.Y.S.2d 264 (1969). There are numerous other indicia of assent unfairly induced. The most common indicium of substantive un-conscionability is unreasonableness from grossly one-sided terms which attempt to change the substance of the bargain, especially by the use of exculpatory clauses, disclaimers and in-termeddling with remedies. Wilson Trading Corp. v. David Ferguson, Ltd., 23 N.Y.2d 398, 297 N.Y.S.2d 108, 244 N.E.2d 685 (1968); Electronic Corp. of America v. Lear Jet Corp., 55 Misc.2d 1066, 286 N.Y.S.2d 711 (1967).

. The inquiry into unconscionability under § 402.2-302 becomes a matter of law under the Code both as to the process of contract formation as well as the substantive agreement. Thus, the element of assent, nature of agreement, and all others are determinable on appeal according to the entire commercial climate of the transaction. Industralease Automated & Scientific Equipment Corp. v. R.M.E. Enterprises, Inc. supra, l. c. 431[3, 4]. In that determination, a court of review, therefore, is not constrained by the rule in Murphy v. Carron, 536 S.W.2d 30 (Mo.banc 1976).
As it was, the trial court concluded as a matter of law that the agreement between King Louie and Funding Systems “unconscionable in that it would deny that the Defendants can show the circumstances existing at the time, would destroy warranties of merchantability and fitness to perform as represented and would deny and destroy the understanding and agreement among the parties that the equipment would belong to Defendant, King Louie, at the end of the period upon the payment of One Dollar ($1.00).” The majority attempts to avoid the effect of this conclusion of law on the theory that the order was merely interlocutory, but without citation or rationale other than the order “remained subject to later modification or reversal” — certainly an incident of any ruling made by the court in a trial to the bench. The determination of unconscionability by the trial court appears to contradict the findings of fact that Funding Systems was not a merchant but transacted in money. In candor, the litigation did not take focus until reargument on appeal.

. Even the negotiated agreement to extend time for acceptance from three days [as provided by paragraph four of the printed form] to ten days is at variance with the actual transaction because the form DELIVERY ACCEPTANCE RECEIPT shows that the equipment was accepted by King Louie on May 7, 1970, [the date the lease was also signed] when, in fact, the equipment was not in place until about June 1, 1970.

. The evidence establishes another, simpler, remedy: revocation of acceptance. [§ 400.2-608; Industralease Automated & Scientific Eq. Corp. v. R.M.E. Enterprises, Inc., supra, l. c. 432, n. 5]. That issue was not made or presented.

. The disclaimers of warranty and defense in an assignment of sale, as these circumstances show, are vulnerable under § 400.9-206 on Secured Transaction [a species of commercial transaction the majority opinion agrees describes the undertaking between IGM, King Louie and Funding Systems]. U.C.C. Comment 3 to that section states:
Subsection (2) makes clear . that purchase money security transactions are sales, and warranty rules for sales are applicable. It also prevents a buyer from inadvertently abandoning his warranties by a “no warranties” term in the security agreement when warranties have already been created under the sales arrangement. Where the sales arrangement and the purchase money security transaction are evidenced by only one writing, that writing may disclaim, limit or modify warranties to the extent permitted by Article 2.” [Emphasis added.]
See also, Equipment Leasing — Leveraged Leasing, Edited by Fritch & Reisman (Second Printing), pp. 45 et seq.; National Bank of N. America v. DeLuxe Poster Co., 18 U.C.C. 802 (N.Y.App.Div.1976); General Elec. Credit Corp. v. Glamorous Laundry Rooms, Inc., 8 U.C.C. 1119 (N.Y.Sup.Ct.1971). The avoidance of the waivers on that ground, however, was not asserted by King Louie.