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The People ex rel. The Board of Trustees of Chicago State University v. Siemens Building Technologies, Inc., 900 N.E.2d 414 (Ill.App. 2008). While this case focuses more on the interpretation of a particular state statute ' the Illinois Public University Energy Conservation Act ' than on leasing law generally, it may be of interest to those contemplating financing for public entities. In connection with its attempt to obtain energy savings using equipment installed by Siemens Building Technologies, the state university entered into a master lease agreement with Siemens Financial Services (though the agreement is called a “lease,” the parties and court consider the substance of the transaction to be a security agreement). One of the issues decided here is whether the aforementioned Act prevents the use of “hell or high water” financing provisions under which the university must pay a lessor/financer for energy conservation measures even if the measures do not produce a savings to the university. In affirming a lower court decision that the Act does not prevent such a financing provision, this court states, “If we presume for purposes of this question that third-party financing was contemplated by the legislature, then the commercial reality of this type of lease makes it clear that the risk as between the lessee and lessor for defective equipment is to be placed on the lessee who has recourse against the supplier.”

OFC Capital v. AT Publishing, Inc., 2008 WL 4962942 (U.S.Ct.App. 9th Cir. Nov. 20, 2008) (not for publication in Federal Reporter; not precedent except as provided by Ninth Circuit rules). After a District Court in Alaska had ruled in favor of the lessor, holding among other things that a finance lessor has no obligation to provide conforming equipment and that the lessee had no right to revoke acceptance, the Ninth Circuit affirms. In particular, the decision indicates that since the lessee realized the equipment was nonconforming before acceptance, it could not rely on 2A-517, which requires that the lessee did not discover the nonconformity as a condition of valid revocation in the case of a finance lease (in addition to the condition ' not referenced by the court ' that the lessee's acceptance had been reasonably induced by the lessor).