SECTIONS 10101-10107 - California Statutes

COMMERCIAL CODE

SECTION 10101-10107

10101. This division shall be known and may be cited as the Uniform
Commercial Code--Leases.

10102. This division applies to any transaction, regardless of
form, that creates a lease.

10103. (a) In this division, unless the context otherwise requires:
(1) "Buyer in ordinary course of business" means a person who, in
good faith and without knowledge that the sale to him or her is in
violation of the ownership rights or security interest or leasehold
interest of a third party in the goods, buys in ordinary course from
a person in the business of selling goods of that kind, but does not
include a pawnbroker. "Buying" may be for cash or by exchange of
other property or on secured or unsecured credit and includes
acquiring goods or documents of title under a preexisting contract
for sale but does not include a transfer in bulk or as security for
or in total or partial satisfaction of a money debt.
(2) "Cancellation" occurs when either party puts an end to the
lease contract for default by the other party.
(3) "Commercial unit" means such a unit of goods as by commercial
usage is a single whole for purposes of lease and division of which
materially impairs its character or value on the market or in use. A
commercial unit may be a single article, as a machine, or a set of
articles, as a suite of furniture or a line of machinery, or a
quantity, as a gross or carload, or any other unit treated in use or
in the relevant market as a single whole.
(4) "Conforming" goods or performance under a lease contract means
goods or performance that are in accordance with the obligations
under the lease contract.
(5) "Consumer lease" means a lease that a lessor regularly engaged
in the business of leasing or selling makes to a lessee who is an
individual and who takes under the lease primarily for a personal,
family, or household purpose.
(6) "Fault" means wrongful act, omission, breach, or default.
(7) "Finance lease" means a lease with respect to which (A) the
lessor does not select, manufacture, or supply the goods, (B) the
lessor acquires the goods or the right to possession and use of the
goods in connection with the lease, and (C) one of the following
occurs:
(i) The lessee receives a copy of the contract by which the lessor
acquired the goods or the right to possession and use of the goods
before signing the lease contract.
(ii) The lessee's approval of the contract by which the lessor
acquired the goods or the right to possession and use of the goods is
a condition to effectiveness of the lease contract.
(iii) The lessee, before signing the lease contract, receives an
accurate and complete statement designating the promises and
warranties, and any disclaimers of warranties, limitations or
modifications of remedies, or liquidated damages, including those of
a third party, such as the manufacturer of the goods, provided to the
lessor by the person supplying the goods in connection with or as
part of the contract by which the lessor acquired the goods or the
right to possession and use of the goods.
(iv) The lessor, before the lessee signs the lease contract,
informs the lessee in writing (aa) of the identity of the person
supplying the goods to the lessor, unless the lessee has selected
that person and directed the lessor to acquire the goods or the right
to possession and use of the goods from that person, (bb) that the
lessee is entitled under this division to the promises and
warranties, including those of any third party, provided to the
lessor by the person supplying the goods in connection with or as
part of the contract by which the lessor acquired the goods or the
right to possession and use of the goods, and (cc) that the lessee
may communicate with the person supplying the goods to the lessor and
receive an accurate and complete statement of those promises and
warranties, including any disclaimers and limitations of them or of
remedies.
(8) "Goods" means all things that are movable at the time of
identification to the lease contract, or are fixtures (Section
10309), but the term does not include money, documents, instruments,
accounts, chattel paper, general intangibles, or minerals or the
like, including oil and gas, before extraction. The term also
includes the unborn young of animals.
(9) "Installment lease contract" means a lease contract that
authorizes or requires the delivery of goods in separate lots to be
separately accepted, even though the lease contract contains a clause
"each delivery is a separate lease" or its equivalent.
(10) "Lease" means a transfer of the right to possession and use
of goods for a term in return for consideration, but a sale,
including a sale on approval or a sale or return, or retention or
creation of a security interest is not a lease. Unless the context
clearly indicates otherwise, the term includes a sublease.
(11) "Lease agreement" means the bargain, with respect to the
lease, of the lessor and the lessee in fact as found in their
language or by implication from other circumstances including course
of dealing or usage of trade or course of performance as provided in
this division. Unless the context clearly indicates otherwise, the
term includes a sublease agreement.
(12) "Lease contract" means the total legal obligation that
results from the lease agreement as affected by this division and any
other applicable rules of law. Unless the context clearly indicates
otherwise, the term includes a sublease contract.
(13) "Leasehold interest" means the interest of the lessor or the
lessee under a lease contract.
(14) "Lessee" means a person who acquires the right to possession
and use of goods under a lease. Unless the context clearly indicates
otherwise, the term includes a sublessee.
(15) "Lessee in ordinary course of business" means a person who,
in good faith and without knowledge that the lease to him or her is
in violation of the ownership rights or security interest or
leasehold interest of a third party in the goods, leases in ordinary
course from a person in the business of selling or leasing goods of
that kind, but does not include a pawnbroker. "Leasing" may be for
cash or by exchange of other property or on secured or unsecured
credit and includes acquiring goods or documents of title under a
preexisting lease contract but does not include a transfer in bulk or
as security for or in total or partial satisfaction of a money debt.
(16) "Lessor" means a person who transfers the right to possession
and use of goods under a lease. Unless the context clearly indicates
otherwise, the term includes a sublessor.
(17) "Lessor's residual interest" means the lessor's interest in
the goods after expiration, termination, or cancellation of the lease
contract.
(18) "Lien" means a charge against or interest in goods to secure
payment of a debt or performance of an obligation, but the term does
not include a security interest.
(19) "Lot" means a parcel or a single article that is the subject
matter of a separate lease or delivery, whether or not it is
sufficient to perform the lease contract.
(20) "Merchant lessee" means a lessee that is a merchant with
respect to goods of the kind subject to the lease.
(21) "Present value" means the amount as of a date certain of one
or more sums payable in the future, discounted to the date certain.
The discount is determined by the interest rate specified by the
parties if the rate was not manifestly unreasonable at the time the
transaction was entered into; otherwise, the discount is determined
by a commercially reasonable rate that takes into account the facts
and circumstances of each case at the time the transaction was
entered into.
(22) "Purchase" includes taking by sale, lease, mortgage, security
interest, pledge, gift, or any other voluntary transaction creating
an interest in goods.
(23) "Sublease" means a lease of goods the right to possession and
use of which was acquired by the lessor as a lessee under an
existing lease.
(24) "Supplier" means a person from whom a lessor buys or leases
goods to be leased under a finance lease.
(25) "Supply contract" means a contract under which a lessor buys
or leases goods to be leased.
(26) "Termination" occurs when either party pursuant to a power
created by agreement or law puts an end to the lease contract
otherwise than for default.
(b) Other definitions applying to this division and the sections
in which they appear are:
"Accessions." Subdivision (a) of Section 10310.
"Construction mortgage." Paragraph (4) of subdivision (a) of
Section 10309.
"Encumbrance." Paragraph (5) of subdivision (a) of Section 10309.
"Fixtures." Paragraph (1) of subdivision (a) of Section 10309.
"Fixture filing." Paragraph (2) of subdivision (a) of Section
10309.
"Purchase money lease." Paragraph (3) of subdivision (a) of
Section 10309.
(c) The following definitions in other divisions apply to this
division:
"Account." Paragraph (2) of subdivision (a) of Section 9102.
"Between merchants." Subdivision (3) of Section 2104.
"Buyer." Paragraph (a) of subdivision (1) of Section 2103.
"Chattel paper." Paragraph (11) of subdivision (a) of Section
9102.
"Consumer goods." Paragraph (23) of subdivision (a) of Section
9102.
"Document." Paragraph (30) of subdivision (a) of Section 9102.
"Entrusting." Subdivision (3) of Section 2403.
"General intangible." Paragraph (42) of subdivision (a) of Section
9102.
"Instrument." Paragraph (47) of subdivision (a) of Section 9102.
"Merchant." Subdivision (1) of Section 2104.
"Mortgage." Paragraph (55) of subdivision (a) of Section 9102.
"Pursuant to commitment." Paragraph (68) of subdivision (a) of
Section 9102.
"Receipt of goods." Paragraph (c) of subdivision (1) of Section
2103.
"Sale." Subdivision (1) of Section 2106.
"Sale on approval." Section 2326.
"Sale or return." Section 2326.
"Seller." Paragraph (d) of subdivision (1) of Section 2103.
(d) In addition, Division 1 contains general definitions and
principles of construction and interpretation applicable throughout
this division.

10104. (a) A lease, although subject to this division, is also
subject to any applicable:
(1) Certificate of title statute of this state, including the
provisions of the Vehicle Code that require registration of a vehicle
or boat and provisions of the Health and Safety Code that require
registration of a mobilehome or commercial coach.
(2) Certificate of title statute of another jurisdiction (Section
10105).
(3) Consumer law of this state, both decisional and statutory,
including, to the extent that they apply to a consumer lease
transaction, Chapter 5 (commencing with Section 17200) of Part 2 of
Division 7 of the Business and Professions Code, Chapter 1
(commencing with Section 17500) of Part 3 of Division 7 of the
Business and Professions Code, and Part 4 (commencing with Section
1725) of Division 3 of the Civil Code.
(b) In case of conflict between this division, other than Section
10105, subdivision (c) of Section 10304, and subdivision (c) of
Section 10305, and a law referred to in subdivision (a), that law
controls.
(c) Failure to comply with an applicable law has only the effect
specified therein.

10105. Subject to the provisions of subdivision (c) of Section
10304 and subdivision (c) of Section 10305, with respect to goods
covered by a certificate of title issued under a statute of this
state or of another jurisdiction, compliance and the effect of
compliance or noncompliance with a certificate of title statute are
governed by the law (including the conflict of laws rules) of the
jurisdiction issuing the certificate until the earlier of (1)
surrender of the certificate, or (2) four months after the goods are
removed from that jurisdiction and thereafter until a new certificate
of title is issued by another jurisdiction.

10106. (a) If the law chosen by the parties to a consumer lease is
that of a jurisdiction other than a jurisdiction in which the lessee
resides at the time the lease agreement becomes enforceable or within
30 days thereafter, in which the goods are to be used, or in which
the lease is executed by the lessee, the choice is not enforceable.
(b) If the judicial forum chosen by the parties to a consumer
lease is in a county other than the county in which the lessee in
fact signed the lease, the county in which the lessee resides at the
commencement of the action, the county in which the lessee resided at
the time the lease contract became enforceable, or the county in
which the goods are permanently stored, the choice is not
enforceable.

10107. Any claim or right arising out of an alleged default or
breach of warranty may be discharged in whole or in part without
consideration by a written waiver or renunciation signed and
delivered by the aggrieved party.