| Sale or Sublease of Goods by Lessee - Ucc 2a-305.

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Effective: November 6, 1992

Latest Legislation: House Bill 693 - 119th General Assembly

(A) Subject to section 1310.31 of the Revised Code, 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 division (B) of this section and division (D) of section 1310.57 of the Revised Code, 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 any of the following applies:

(1) The lessor was deceived as to the identity of the lessee.

(2) The delivery was in exchange for a check that is later dishonored.

(3) The delivery was procured through fraud punishable as a theft offense under Chapter 2913. of the Revised Code or another law.

(B) 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.

(C) 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 Chapter 1548., 4505., or 4585. of the Revised Code or a similar law of another jurisdiction takes no greater rights than those provided both by this section and by the certificate of title law.


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