§490:2A-305  Sale or sublease of goods by
lessee.  (a)  Subject to the provisions of section 490:2A-303, a buyer or
sublessee from the lessee of goods under an existing lease contract obtains, to
the extent of the interest transferred, the leasehold interest in the goods
that the lessee had or had power to transfer, and except as provided in
subsection (b) and section 490:2A-511(d), takes subject to the existing lease
contract.  A lessee with a voidable leasehold interest has power to transfer a
good leasehold interest to a good faith buyer for value or a good faith
sublessee for value, but only to the extent set forth in the preceding
sentence.  When goods have been delivered under a transaction of lease the
lessee has that power even though:



(1)  The lessor was deceived as to the identity of the
lessee;



(2)  The delivery was in exchange for a check which is
later dishonored; or



(3)  The delivery was procured through fraud
punishable as larcenous under the criminal law.



(b)  A buyer in the ordinary course of business
or a sublessee in the ordinary course of business from a lessee who is a
merchant dealing in goods of that kind to whom the goods were entrusted by the
lessor obtains, to the extent of the interest transferred, all of the lessor's
and lessee's rights to the goods, and takes free of the existing lease
contract.



(c)  A buyer or sublessee from the lessee of
goods that are subject to an existing lease contract and are covered by a
certificate of title issued under a statute of this State or of another
jurisdiction takes no greater rights than those provided both by this section
and by the certificate of title statute. [L 1991, c 40, pt of §1]