Oregon Statutes - Chapter 79 - Secured Transactions - Section 79.0407 - UCC 9-407. Restrictions on creation or enforcement of security interest in leasehold interest or in lessorís residual interest.

(1) Except as otherwise provided in subsection (2) of this section, a term in a lease agreement is ineffective to the extent that it:

(a) Prohibits, restricts or requires the consent of a party to the lease to the assignment or transfer of, or the creation, attachment, perfection or enforcement of a security interest in, an interest of a party under the lease contract or in the lessorís residual interest in the goods; or

(b) Provides that the assignment or transfer or the creation, attachment, perfection or enforcement of the security interest may give rise to a default, breach, right of recoupment, claim, defense, termination, right of termination or remedy under the lease.

(2) Except as otherwise provided in ORS 72A.3030 (7), a term described in subsection (1)(b) of this section is effective to the extent that there is:

(a) A transfer by the lessee of the lesseeís right of possession or use of the goods in violation of the term; or

(b) A delegation of a material performance of either party to the lease contract in violation of the term.

(3) The creation, attachment, perfection or enforcement of a security interest in the lessorís interest under the lease contract or the lessorís residual interest in the goods is not a transfer that materially impairs the lesseeís prospect of obtaining return performance or materially changes the duty of or materially increases the burden or risk imposed on the lessee within the purview of ORS 72A.3030 (4) unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the lessor. [2001 c.445 §69]

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Last modified: August 7, 2008