Exam 17: UCC Article 2A: Lease Contracts

What is the threshold amount in the lease which requires a writing?

What does a lease not transfer?

What document is necessary for a lessor to file when acquiring a security interest in collateral?

Which party acts as a middleman in a finance lease?

A business signs a three-year "lease" for a very old copier that only has an additional two-year useful life. What does the business maintain?

Article 2A applies to the lease of goods and real estate leases.

Which of the following statements best describes what a secured transaction is?

A secured transaction occurs when the seller retains a security __________ in the goods being sold.

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.

What must be included in a finance lease?

Baked Goods Inc. wants to lease an oven from Oven Corp. for use in its bakery business. Baked Goods's bank agrees to purchase the equipment from Oven Corp. and then lease the equipment to Baked Goods. In this scenario, identify who is the lessor and the lessee and why?

According to the UCC, the true lease of goods involves the payment for __________ possession with an expectation that the goods will be returned to the owner at the end of the lease term.

__________ is often an attractive alternative because the business can use equipment on an exclusive basis without the large up-front investment required to purchase it.

What law states that if the total payments to be made under the lease, excluding payments for options to renew or buy, are $1,000 or more, the lease must be in writing?

Jane makes payments to a company for office equipment she intends to keep at the end of the lease by renewing the lease for the remaining useful life of the equipment. What type of transaction does Jane intend to pursue?

The UCC applies its warranty rules for the sale of goods to leases.

Jimmy drives a company car for Acme Corp. Acme Corp. leased the car from Toyota for three years. Jimmy drives to and from work but also uses the car to take his kids to soccer practice three times a week. Will Acme Corp be able to claim depreciation on the car or tax benefits for the mileage?

Hugh's Hot Dogs is in need of push carts for their recent marketing push to local lunch time workers. In efforts to acquire additional equipment, Hugh's CEO seeks out new suppliers. They have recently decided to lease the push carts from a local restaurant supply store. The store requests a lease agreement be signed by Hugh's Hot Dogs. Who is the lessor? The lessee?

Many business firms prefer to buy personal property, such as the machinery and heavy equipment rather than lease it.

What type of title does a secured transaction pass to the buyer?