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What's New in the Law

BY Robert W. Ihne
August 31, 2011

Ability to Collect Rentals

GreatAmerica Leasing Corp. v. Wahoo Productions of Florida, Inc., 2011 WL 1559935 (U.S.Dist.Ct. N.D.Iowa April 21, 2011)

Notwithstanding the fact that not all of the equipment subject to a lease had been delivered and accepted, this court finds that the lessor was entitled to collect all of the scheduled lease payments. The court initially states that it need not resolve the issue as to whether a relatively brief lease provision regarding non-cancelability constituted a hell-or-high-water obligation because the parties agreed that the lease is an Article 2A finance lease. This conclusion seems a bit strange since, as the court itself recites, acceptance of the goods is a prerequisite for satisfying the statutory meaning of “finance lease.” In any event, the court's conclusion of full liability rests primarily on a lease addendum, signed by the lessee to induce the lessor's payment to the supplier of the goods, in which the lessee promises to make all payments under the lease even if some or all of the goods are not delivered and/or installed.

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