Assuring the Lessors' Protections Afforded By the Finance Lease
February 28, 2006
Generally, the lessor/lessee relationship is governed by Article 2A of the Uniform Commercial Code (the "UCC"). In many respects, Article 2A mirrors Article 2, treating ordinary lessors like sellers. 2 James J. White & Robert S. Summers, Uniform Commercial Code '13-3 (4th ed. 2005). For example, under UCC '2A-210 the ordinary lessor has express warranty liability similar to that incurred by a seller under UCC '2-313. Additionally, Sections 2A-212 and 2A-213 impose the familiar warranties of merchantability and fitness for a particular purpose on ordinary lessors. A lessee can assert the lessor's breach of these warranties by effectuating setoff, by suit for damages or by withholding performance. <i>Id.</i> Furthermore, where the lessee has filed a petition for relief under Title 11 of the United States Code (the "Bankruptcy Code"), the debtor-lessee may object to the allowance of the creditor-lessor's claim for rejection damages by asserting that the leased equipment was defective or unsuitable for the lessee's particular business.
In The Marketplace
February 28, 2006
Highlights of the latest Equipment Leasing news from around the country.
Libeling Lawnmowers?
February 27, 2006
The tort of commercial disparagement falls generally within the penumbra of libel and slander-related claims, although it is overshadowed by the more commonly recognized version of the tort relating to personal claims (like those celebrities frequently bring against supermarket tabloids). Yet not only are claims based upon the libeling of an object a legitimate cause of action, they can result in verdicts for plaintiffs. A better understanding of this little-known tort is necessary if a company is to evade the risks it poses.
Avoiding Boilerplate Traps in Commercial Leases
February 27, 2006
Boilerplate in a commercial lease ' notably in the Miscellaneous section ' is not nearly as uniform and standard as one might think. Boilerplate provisions therefore merit careful review by each party to the lease, and sometimes vigorous negotiation. Law firms are often tenants but sometimes also landlords; the authors provide advice for protecting both interests.
Creating an Effective In-House Resource Guide
February 27, 2006
Living in the technology age, we are besieged by information: constant "breaking stories" on 24-hour news channels, e-mails at all hours to our handhelds, and phone calls to our cells. To remain competitive, companies have also followed the trend, providing reams of information and data to workers. As a result, employees now grapple with information overload and must evaluate and prioritize what information to read, disseminate and store, and what information to discard. This is a particularly significant problem for in-house counsel who must ensure that all employees have access to -- and know about -- information that is key to the operation of the company. More importantly, much of this information is meant to keep the company out of the courtroom and facing down litigation. So what's an in-house counsel to do?
A Guide to Landlord Lien Waivers
February 27, 2006
Businesses borrow money. Security for the repayment of a loan often includes a lien granted by the borrower to its lender on the borrower's equipment, trade fixtures and inventory ("Tenant's Property"). A lender and its borrower can expend significant time and resources negotiating the loan documents whereby the borrower grants the lender a security interest in Tenant's Property. Of course, businesses also frequently lease the space in which they conduct their operations ("Leased Premises"). If they plan to locate portions of Tenant's Property within a Leased Premises, a conflict of interests inevitably arises between the lender and the owner of the Leased Premises, <i>ie</i>, the borrower's landlord. A lender will want to obtain an unfettered right to enter the Leased Premises and remove the Tenant's Property without being deemed a trespasser or a converter of any interest of the landlord in Tenant's Property.
In the Spotlight: Outparcel Leasing and Sales ' Concepts to Consider
February 27, 2006
When leasing or selling parcels of property that are located outside of an enclosed shopping center but within the perimeter of the shopping center property (<i>eg</i>, along the interior road of the shopping center, along the peripheral boundary of the shopping center, or along shared parking fields of a shopping center), a landlord should consider several concepts that may not be considered critical issues when leasing in-line space. However, for purposes of leasing or selling outparcel locations, these concepts are not only financially important to the landlord, but also will impact the day-to-day operations of a shopping center. These concepts include parking, insurance/casualty, maintenance and repair, and signage.
The Leasing Hotline
February 27, 2006
Highlights of the latest commercial leasing cases from around the country.
Best + Efforts = ?
February 27, 2006
There is a common misconception that the obligation to satisfy a "best efforts" clause requires rigorous performance, regardless of hardship or cost to the promisor. This misconception of the meaning of the term "best efforts" stems from the divergence between common parlance and jurisprudence. Considering the term in the vernacular, "best efforts" implies superlative action. Therefore, when one puts forth one's "best efforts," such action is not simply good, or better, but the best according to one's capabilities. James M. Van Vliet, Jr., <i>"Best Efforts" Promises Under Illinois Law,</i> Ill. B.J. 5 (Dec. 2000). The implication is that to satisfy a promise for "best efforts," there is no limit as to what one will do, no hardship or expense too great to satisfy the obligation. In fact, it would appear that many believe this to be the definition of "best efforts."
