What is UCC Article 2A?

What is UCC Article 2A?

Uniform Commercial Code Article 2A is a proposed set of laws relating to personal property leasing. This “hell or high water” protection applies only to lessors who are not, in fact, the manufacturer or other vendor of the leased equipment. If the lease from such a lessor qualifies, it will be a UCC-2A “finance lease.”

What does Article 2 and 2A of the UCC cover?

Article 2 of the UCC deals with the sale of goods. Sale and goods have defined meanings. Article 2A of the UCC deals with the leasing of goods. Lease has a defined meaning, and the UCC recognizes two types of leases: consumer leases and finance leases.

What types of contracts fall under Article 2 of UCC?

Article 2 of the UCC deals only with transaction of goods. It does not apply to any transaction intended to operate only as a security transaction. However, the Article does not impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers.

What is a UCC lease?

The leases covered by the Uniform Commercial Code (UCC) are for personal property, or what the Code calls “goods,” such as machinery, equipment, and vehicles. The UCC does not cover real estate leases. Most of the rules for commercial lease contracts are in Article 2A, which has nearly 80 individual sections.

Does UCC Article 2 apply to leases?

While it may be commonly known that Article 2 of the Uniform Commercial Code (“UCC”) applies to the sale of goods, Article 3 applies to negotiable instruments and that Article 9 applies to secured transactions, often overlooked is that Article 2, specifically Article 2A, also applies to leases of goods.

What is a true lease?

Generally speaking, a “true lease” is commonly understood to be an arrangement in which the risks and rewards of ownership are retained by the lessor of the relevant asset or property, while the lessee is entitled only to retain possession and use of such asset or property for a defined period.

What is a good under UCC Article 2?

Article 2 is a vast segment of the UCC that specifically addresses contracts for the sale of goods. A good is any movable property identified at the time of the contract. ‘Goods’ are also sometimes known as ‘chattels. ‘

Does UCC Article 2 apply to services?

If it is for services, then UCC Article 2 does not apply; if it is for goods, then UCC Article 2 does apply. The challenge is that many construction agreements involve providing services and selling goods.

Is UCC Article 2A friend or foe?

UCC Article 2A: Friend or Foe? Uniform Commercial Code Article 2A is a proposed set of laws relating to personal property leasing. As of this writing, Article 2A has been adopted in 47 states and the District of Columbia (excluding only Louisiana, South Carolina and Vermont).

What is a 2A 101 UCC?

UCC §2A-101, comments (emphasis added). For example §2A-209 automatically extends the seller’s warranties (and their exclusions) to the lessee and automatically excludes any implied warranties of fitness or merchantability by the lessor. Shrank, supra at §3:1.5 [B].

What is UCC §7-2a-103?

UCC §7-2A-103, comment (g). Indeed, the UCC “provisions are merely codifications of standard commercial leasing practices that previously were achieved by contract rather than by statute.” Shrank, supra at §3:1.10 [A].

What does Article 3 of the UCC code mean?

Article 3, Negotiable Instruments Uniform Commercial Code Article 3 governs negotiable instruments: drafts (including checks) and notes representing a promise to pay a sum of money, and that have independent value because they are negotiable.