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American Indians and Lease Transactions
There are more than 500 nationally recognized Indian tribes in the United States, and as a general rule, state civil laws do not apply to transactions in which they are involved (whether on reservations or not).
Due to the increasing amount of commerce taking place with and in Indian nations, it is not unlikely that more equipment lessors will soon find themselves examining potential lease agreements with various types of businesses located in Indian country, as well as with the nations themselves. A basic rule of thumb for companies seeking to do business in Indian country is that a tribe has the sovereign power to enact and enforce civil laws regulating the conduct of its members, and of non-Indians who come upon tribal land. 'Uniform Laws and Tribal Legislation; One Tribe's Perspective', 26 Am. Indian L. Rev. 89, 95 (2002).
When choosing to do business in Indian country, lessors need to be aware of a couple of important issues when determining how to protect their interest in property. They first need to learn where (and how) to record notice of their interest in property. In most cases this means where to file UCC financing statements. Furthermore, lessors must analyze the appropriate procedure for recovering their property if a lessee defaults on the lease. The outcome of these issues varies from tribe to tribe and the specific tribal code must be examined before entering into a transaction.
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