Ch 15: Leases and Consignments

Question 1

a “Lessee” is treated as a Secured Party if:

Answer 1

1) the lessee of the property is required to pay the FULL obligation under the lease, whether or not they terminate the lease early
AND

2) either
- the original term of the lease is = to or greater than the remaining economic life of the goods; OR
- the lessee is bound to renew the lease for the remaining economic life of the goods; OR
- the lessee has the option to renew the lease for the remains economic life of the goods for no additional consideration; or nominal consideration; OR
- the lessee has the option to become the owner of the goods for no or nominal additional consideration

If 1) + 2), treat as SP. needs to file or otherwise perfect

Question 2

“Consignments” definition

Answer 2

a co-signer party gives has ownership of goods buts gives possession to the consignee for the purpose of allowing the consignee to sell the goods