Okla. Stat. tit. 12A § 2A-407

Current through Laws 2024, c. 453.

Section 2A-407 - Irrevocable Promises; Finance Leases

(1) In the case of a finance lease that is not a consumer lease the lessee's promises under the lease contract become irrevocable and independent upon the lessee's acceptance of the goods.

(2) A promise that has become irrevocable and independent under subsection (1) of this section:

(a) is effective and enforceable between the parties, and by or against third parties including assignees of the parties, and

(b) is not subject to cancellation, termination, modification, repudiation, excuse, or substitution without the consent of the party to whom the promise runs.

(3) This section does not affect the validity under any other law of a covenant in any lease contract making the lessee's promises irrevocable and independent upon the lessee's acceptance of the goods.

Okla. Stat. tit. 12A, § 2A-407

Added by Laws 1988, HB 1683, c. 86, § 47, eff. 11/1/1988; Amended by Laws 1991, SB 25, c. 117, § 11, eff. 1/1/1992.

Oklahoma Code Comment

In a finance lease ( §2A-103(1)(g)) that is not a consumer lease ( § 2A-103(1)(e)), subsection (1) renders the common "hell or high water" clause appearing in such leases unnecessary surplusage; such a clause is statutorily written into such leases by this provision. Such a clause, whether statutory or contractual, requires a lessee to continue payment of the rent to whomever it is owed, lessor or assignee, no matter what obligations the lessor or another party such as the supplier may have failed to perform. See § 2A-407(2). Whether such a clause really is needed if the claim is against the supplier and not the lessor, or could be enforced if the lessor was in default and was suing the lessee, probably is academic; in most instances the suit is by an assignee of the lessor. See, e.g., In re O.P.M. Leasing Servs., 21 B.R. 993 (Bankr. S.D.N. Y. 1982). In that context the clause operates much like a waiver of defenses clause without the need for the assignee to establish the absence of notice. See 12A Oklahoma Statutes § 9-206(1). Viewed as such, the concept clearly is variance with the abolition of the holder in due course doctrine in consumer transactions, and it is for that reason the statutory provision is inapplicable to a consumer finance lease. See § 2A-407, Official Comment.

Whether the same result that is provided statutorily for some leases may be reached by contract for other leases depends upon other law. The 1991 amendments clarify this point. Generally the clause should be good, as is the similar waiver of defenses clause. See 12A Oklahoma Statutes § 9-206. However, with respect to a consumer lease, while such a clause would not be precluded under the current Federal Trade Commission rule on Preservation of Consumers' Claims and Defenses, 16 C.F.R. 433 , because that rule does not cover leases that are not security interests (see 16 C.F.R. § 433.1(d), (e) and (i) and § 433.2 ) , in Oklahoma the U3C would preclude taking a negotiable note for the lease obligation or exercising a waiver of defenses clause (which should include this type of clause) without notice. See 14A Oklahoma Statutes §§ 2-403 and 2-404.