University:
Indiana University Bloomington
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

183

Pages:

2
Author:

bratrochanter

Summary of Appendix B: UCC Article 2A - Leases Key Definitions and Concepts (§ 2A–101 to § 2A–105) 1. General Scope (§ 2A–102): o Applies to transactions creating a lease for goods. 2. Key Definitions (§ 2A–103): o Lease: Transfer of possession and use of goods for a term in return for payment. o Finance Lease: A lease where the lessor acquires goods for leasing and does not select or supply them. o Consumer Lease: A lease primarily for personal, family, or household purposes. o Commercial Unit: A single whole treated as indivisible in the lease or market. o Present Value: Future payment amounts discounted to a present-day equivalent. 3. Territorial Application (§ 2A–105): o Lease contracts involving goods with certificates of title are governed by the issuing jurisdiction's laws. 4. Other Applicable Laws (§ 2A–104): o Leases are also subject to state-specific certificate of title or consumer protection statutes. Formation and Construction of Lease Contracts (§ 2A–201 to § 2A–208) 1. Statute of Frauds (§ 2A–201): o Lease contracts must be in writing if total payments exceed $1,000, unless:  The goods are specially manufactured.  The contract is admitted in court.  Goods have been received and accepted. 2. Final Written Agreements (§ 2A–202): o Written agreements cannot be contradicted by prior or contemporaneous oral agreements but may be explained by:  Course of dealing, usage of trade, or course of performance.  Consistent additional terms (if not fully integrated). 3. Formation Principles (§ 2A–204): o Lease contracts can be formed by any conduct showing agreement, even if the exact moment of formation is uncertain. 4. Modifications and Waivers (§ 2A–208): o Lease agreements can be modified without consideration unless explicitly excluded in the contract. Consumer Protection in Leases (§ 2A–106 to § 2A–109) 1. Choice of Law and Forum (§ 2A–106): o In consumer leases, chosen laws or forums must have a connection to the lessee's residence or the location of the goods. 2. Unconscionability (§ 2A–108): o Courts may refuse to enforce unconscionable lease terms or limit their application. o For consumer leases, courts can award attorney's fees to the lessee if unconscionability is proven. 3. Acceleration of Payment (§ 2A–109): o Lessor's right to demand early payment or collateral is valid only if exercised in good faith. Special Rules for Lease Offers and Firm Offers (§ 2A–205 to § 2A–207) 1. Firm Offers (§ 2A–205): o A merchant's signed offer to lease goods remains irrevocable for up to three months if stated. 2. Offer and Acceptance (§ 2A–206): o Acceptance of a lease offer can occur by reasonable means, including beginning performance. 3. Course of Performance (§ 2A–207): o Repeated conduct by parties can help interpret the lease's meaning or modify terms.