WILLIAM DONALD SCHAEFER, Governor                            Ch. 535

GOODS WITH DUE ALLOWANCE FROM THE RENT PAYABLE FOR THE BALANCE OF
THE LEASE TERM FOR THE DETERIORATION OR THE DEFICIENCY IN QUANTITY BUT
WITHOUT FURTHER RIGHT AGAINST THE LESSOR.

SUBTITLE 3. EFFECT OF LEASE CONTRACT

2A-301. ENFORCEABILITY OF LEASE CONTRACT

EXCEPT AS OTHERWISE PROVIDED IN THIS ARTICLE, A LEASE CONTRACT IS
EFFECTIVE AND ENFORCEABLE ACCORDING TO ITS TERMS BETWEEN THE PARTIES,
AGAINST PURCHASERS OF THE GOODS, AND AGAINST CREDITORS OF THE PARTIES.

2A-302. TITLE TO AND POSSESSION OF GOODS

EXCEPT AS OTHERWISE PROVIDED IN THIS ARTICLE, EACH PROVISION OF THIS
ARTICLE APPLIES WHETHER THE LESSOR OR A THIRD PARTY HAS TITLE TO THE
GOODS, AND WHETHER THE LESSOR, THE LESSEE, OR A THIRD PARTY HAS
POSSESSION OF THE GOODS, NOTWITHSTANDING ANY STATUTE OR RULE OF LAW
THAT POSSESSION OR THE ABSENCE OF POSSESSION IS FRAUDULENT.

2A-303. ALIENABILITY OF PARTY'S INTEREST UNDER LEASE CONTRACT OR OF
LESSOR'S RESIDUAL INTEREST IN GOODS; DELEGATION OF PERFORMANCE;
TRANSFER OF RIGHTS

(1)      AS USED IN THIS SECTION, "CREATION OF A SECURITY INTEREST"
INCLUDES THE SALE OF A LEASE CONTRACT THAT IS SUBJECT TO ARTICLE 9,
SECURED TRANSACTIONS, BY REASON OF § 9-102(l)(B).

(2)      EXCEPT AS PROVIDED IN SUBSECTIONS (3) AND (4), A PROVISION IN A
LEASE AGREEMENT WHICH (I) PROHIBITS THE VOLUNTARY OR INVOLUNTARY
TRANSFER, INCLUDING A TRANSFER BY SALE, SUBLEASE, CREATION OR
ENFORCEMENT OF A SECURITY INTEREST, OR ATTACHMENT, LEVY, OR OTHER
JUDICIAL PROCESS, OF AN INTEREST OF A PARTY UNDER THE LEASE CONTRACT OR
OF THE LESSOR'S RESIDUAL INTEREST IN THE GOODS, OR (II) MAKES SUCH A
TRANSFER AN EVENT OF DEFAULT, GIVES RISE TO THE RIGHTS AND REMEDIES
PROVIDED IN SUBSECTION (5), BUT A TRANSFER THAT IS PROHIBITED OR IS AN
EVENT OF DEFAULT UNDER THE LEASE AGREEMENT IS OTHERWISE EFFECTIVE.

(3)      A PROVISION IN A LEASE AGREEMENT WHICH (I) PROHIBITS THE
CREATION OR ENFORCEMENT OF A SECURITY INTEREST IN AN INTEREST OF A
PARTY UNDER THE LEASE CONTRACT OR IN THE LESSOR'S RESIDUAL INTEREST IN
THE GOODS, OR (II) MAKES SUCH A TRANSFER AN EVENT OF DEFAULT, IS NOT
ENFORCEABLE UNLESS, AND THEN ONLY TO THE EXTENT THAT, THERE IS AN
ACTUAL TRANSFER BY THE LESSEE OF THE LESSEE'S RIGHT OF POSSESSION OR USE
OF THE GOODS IN VIOLATION OF THE PROVISION OR AN ACTUAL DELEGATION OF A
MATERIAL PERFORMANCE OF EITHER PARTY TO THE LEASE CONTRACT IN
VIOLATION OF THE PROVISION. NEITHER THE GRANTING NOR THE ENFORCEMENT
OF A SECURITY INTEREST IN (I) THE LESSOR'S INTEREST UNDER THE LEASE
CONTRACT OR (II) THE LESSOR'S RESIDUAL INTEREST IN THE GOODS IS A TRANSFER
THAT MATERIALLY IMPAIRS THE PROSPECT OF OBTAINING RETURN PERFORMANCE
BY, MATERIALLY CHANGES THE DUTY OF, OR MATERIALLY INCREASES THE

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