Law Outlines Oklahoma Bar Bundle Outlines
I entirely handwrote my notes for each subject of the bar exam and then used my notes to create my outlines for each subject. I passed the exam in 2012 on the first attempt. ...
The following is a more accessible plain text extract of the PDF sample above, taken from our Oklahoma Bar Bundle Outlines. Due to the challenges of extracting text from PDFs, it will have odd formatting:
Leases: Article 2A
INTRODUCTION
Article 2A generally follows Article 2 by substituting the term "lease" for the term "sale" but there are a few new or different rules in Article 2A
Oklahoma has adopted Article 2A, so if it shows up, it will be in essay
SCOPE OF ARTICLE 2A
Lease Defined
A "lease" is:
A "transfer of the right to possession and use of goods for a term in return for consideration"
"goods" identified same as in Article 2:
moveable at time of identification to the contract
Sublease Included
Lease includes a "sublease"
Lease vs. Disguised Sale on Credit
Article 2A applies only to TRUE LEASES
If so called lease is really a sale of goods on credit, Article 2A doesn’t apply
Lessor really is a seller of goods and is also an Article 9 secured party who should take steps Article 9 requires for perfection of the interest in the goods
Test For Distinguishing a Lease from a Disguised Sale
Disguised Sale If:
Lessee has no right to terminate his obligation to pay during the lease term,
AND
Lease term (including mandatory renewals) is equal to or greater than the economic life of the goods or gives the 'lessee" an Option to Renew for the rest of the economic life for nominal or no additional consideration
OR
Lease provides that the "lessee" will become owner of the goods or has an option to purchase the goods for nominal or no additional consideration.
Example
Sally agree sell tractor to Bob on credit. But for tax reasons they decide to disguise it as a lease. Draw up a "lease". So-called lease will run for 10 years, the entire useful life of the tractor. Lease not terminable by Bob, but Sally can repossess in event Bob doesn’t pay. Lease says at end of 10 years, goods become Bob's if pay $1.
This is not a true lease, but a sale of goods, and so governed by Article 2 and 9 if gonna take security interest
Factors That by Themselves Don’t Indicate a Disguised Sale
Lessee pays consideration equal to or greater than FMV of leased goods (as long as doesn’t cover total economic life
Lessee has an option to renew the lease or become owner of goods
Lessee assumes major duties
Paying taxes, risk of loss, etc.
Protective Article 9 Filing
For situations of doubt, article 9 allows lessors to make a protective filing under Article 9, file financing statement but use terms lessor and lessee instead of secured party and debtor
If alleged lease later found to be secured transaction, filing will protect seller from other creditors
ARTICLE 2 RULES COPIED
In General
Just minor differences between 2 & 2A which are noted below
Statute of Frauds
Lease must be in writing if the total payments under the lease will be $1000 or more.
Signed by party against whom enforcement sought
Describe leased goods & lease term
Indicate lease contract been made
QUANTITY OF LEASED GOODS
No "Battle of the Forms" Provision
No battle of the forms provision
So, should be Mirror Image
Consumer Protection
If lessee is consumer, a consumer lease arises
Rules for Consumer Leases:
Option to Accelerate at Will
If lease has a term allowing acceleration of the entire lease obligation at the will of the lessor, the term is enforceable only if the lessor exercises it in good faith
Burden on lessor to show good faith
Unconscionability
2A contains unconscionability section like Article 2, but does even further.
Substantive Unconscionability Not Required
Only requires procedural unconscionability
IF consumer lease has been induced by unconscionable conduct, the court may award appropriate relief even though the lease is otherwise fair.
Same rule applies if lessor engages in unconscionable conduct in the collection of a claim arising from the lease
Such as suing force or violence
Attorney Fees
Successful consumer permitted recover attorney fees
Amount of fees not limited by amount of recovery
If consumer loses lawsuit, & court finds consumer knew action groundless, consumer pay attny fees.
WARRANTIES
In General
Lessor makes all the usual warranties made by a seller in Article 2
One MAJOR EXCEPTION:
Finance Lease
In a "finance lease" lessee, instead of buying goods & financing the sale, has the lessor buy the goods from a seller (supplier) and then lease them to the lessee
If lessor is in business of selecting or manufacturing or selling the kinds of goods involved, NO FINANCE LEASE OCCURS.
Lessor must be true financer, and lessee must be the person who selects the goods or approves their purchase.
Ex. Waldo picks out car of dreams at car dealership, but for tax reasons did not want buy car but to lease it. Waldo goes to bank and gets them to buy the car and lease it to him for 3 years. This is a Finance Lease.
Bank= lessor
Waldo= lessee
Car Dealership= Supplier
Finance Lease Warranties:
Lessor makes NO IMPLIED WARRANTIES
Instead, ANY WARRANTIES, express or implied, MADE BY SUPPLIER to the lessor are PASSED ON TO LESSEE, who has direct cause of action against the supplier to extent of lessee's interest in the goods
The "Hell or High Water" Clause
Imposes absolute obligation on lessee to make payments to lessor no matter how badly the leased goods perform or break down.
Lessee is supposed to deal w/ supplier to work out problems & must keep making the lease payments in meantime.
Clause exists by law, whether in lease or not
Kicks in as soon as lessee "accepts' the goods
DOESN’T APPLY TO CONSUMER LEASES
REMEDIES
Default by Lessor
Default by lessor gives lessee same rights and remedies the lessee would have had if the transaction had been a sale & Article 2 applied
May accept goods & recover damages for breach of warranty
Or
May reject goods and...
Buy the full version of these notes or essay plans and more in our Oklahoma Bar Bundle Outlines.
I entirely handwrote my notes for each subject of the bar exam and then used my notes to create my outlines for each subject. I passed the exam in 2012 on the first attempt. ...
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