Chapter 72A — Leases

72A.1010 Short title

This chapter may be cited as the Uniform Commercial Code–Leases.

72A.1020 Scope

This chapter applies to any transaction, regardless of form, that creates a lease and, in the case of a hybrid lease as defined in ORS 72A.1030, it applies to the extent provided in subsection (2) of this section. In a hybrid lease: If the lease-of-goods aspects do not predominate: Only the provisions of this chapter that relate primarily to the lease-of-…

72A.1030 Definitions and index of definitions

As used in this chapter, unless the context otherwise requires: “Buyer in ordinary course of business” means a person who in good faith and without knowledge that the sale to the person is in violation of the ownership rights or security interest or leasehold interest of a third party in the goods buys in ordinary course from a person in the business of sel…

72A.1040 Leases subject to other statutes

A lease, although subject to this chapter, is also subject to any applicable: Certificate of title statute of this state; Certificate of title statute of another jurisdiction as described in ORS 72A.1050; or Consumer protection statute of this state, or final consumer protection decision of a court of this state existing on November 4, 1993. In case of c…

72A.1050 Territorial application of act to goods covered by certificate of title

Subject to the provisions of ORS 72A.3040 and 72A.3050, with respect to goods covered by a certificate of title issued under a statute of this state or of another jurisdiction, compliance and the effect of compliance or noncompliance with a certificate of title statute are governed by the law, including the conflict of laws rules, of the jurisdiction issuing…

72A.1060 Limitation on power of parties to consumer lease to choose applicable law and judicial forum

If the law chosen by the parties to a consumer lease is that of a jurisdiction other than a jurisdiction in which the lessee or lessor resides at the time the lease agreement becomes enforceable or within 30 days thereafter or in which the goods are to be used, the choice is not enforceable. If the judicial forum chosen by the parties to a consumer lease is…

72A.1070 Waiver or renunciation of claim or right after default

Any claim or right arising out of an alleged default or breach of warranty may be discharged in whole or in part without consideration by a waiver or renunciation in a signed record delivered by the aggrieved party.

72A.1080 Unconscionability

If the court as a matter of law finds a lease contract or any clause of a lease contract to have been unconscionable at the time it was made the court may refuse to enforce the lease contract, or it may enforce the remainder of the lease contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid an…

72A.1090 Option to accelerate at will

A term providing that one party or the party’s successor in interest may accelerate payment or performance or require collateral or additional collateral “at will” or “when the party purports to be insecure” or in words of similar import must be construed to mean that the party has power to do so only if the party in good faith believes that the prospect of …

72A.1095 Subordination by agreement

Nothing in this chapter prevents subordination by agreement by any person entitled to priority. FORMATION AND CONSTRUCTION OF LEASE CONTRACT

72A.2010 Statute of frauds

A lease contract is not enforceable by way of action or defense unless: The total payments to be made under the lease contract, excluding payments for options to renew or buy, are less than $1,000; or There is a record, signed by the party against whom enforcement is sought or by that party’s authorized agent, sufficient to indicate that a lease contract h…

72A.2020 Final expression; parol or extrinsic evidence

Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a record intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or s…

72A.2030 Seals inoperative

The affixing of a seal to a record evidencing a lease contract or an offer to enter into a lease contract does not render the record a sealed instrument and the law with respect to sealed instruments does not apply to the lease contract or offer.

72A.2040 Formation in general

A lease contract may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of a lease contract. An agreement sufficient to constitute a lease contract may be found although the moment of its making is undetermined. Although one or more terms are left open, a lease contract does not fail for ind…

72A.2050 Firm offers

An offer by a merchant to lease goods to or from another person in a signed record that by its terms gives assurance it will be held open is not revocable, for lack of consideration, during the time stated or, if no time is stated, for a reasonable time, but in no event may the period of irrevocability exceed three months. Any such term of assurance on a for…

72A.2060 Offer and acceptance in formation of lease contract

Unless otherwise unambiguously indicated by the language or circumstances, an offer to make a lease contract must be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances. If the beginning of a requested performance is a reasonable mode of acceptance, an offeror who is not notified of acceptance within a reasonable…

72A.2070 [1989 c.676 §16; repealed by 2009 c.181 §116]

72A.2080 Modification, rescission and waiver

An agreement modifying a lease contract needs no consideration to be binding. A signed lease agreement that excludes modification or rescission except by a signed record may not be otherwise modified or rescinded, but, except as between merchants, such a requirement on a form supplied by a merchant must be separately signed by the other party. Although an …

72A.2090 Lessee under finance lease as beneficiary of supply contract

The benefit of a supplier’s promises to the lessor under the supply contract and of all warranties, whether express or implied, including those of any third party provided in connection with or as part of the supply contract, extends to the lessee to the extent of the lessee’s leasehold interest under a finance lease related to the supply contract, but is su…

72A.2100 Express warranties

Express warranties by the lessor are created as follows: Any affirmation of fact or promise made by the lessor to the lessee which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods will conform to the affirmation or promise. Any description of the goods which is made part of the basis of the bargai…

72A.2110 Warranties against interference and against infringement; lessee’s obligation against infringement

There is in a lease contract a warranty that for the lease term no person holds a claim to or interest in the goods that arose from an act or omission of the lessor, other than a claim by way of infringement or the like, which will interfere with the lessee’s enjoyment of its leasehold interest. Except in a finance lease there is in a lease contract by a le…

72A.2120 Implied warranty of merchantability

Except in a finance lease, a warranty that the goods will be merchantable is implied in a lease contract if the lessor is a merchant with respect to goods of that kind. Goods to be merchantable must at least: Pass without objection in the trade under the description in the lease agreement; In the case of fungible goods, be of fair average quality within t…

72A.2130 Implied warranty of fitness for particular purpose

Except in a finance lease, if the lessor at the time the lease contract is made has reason to know of any particular purpose for which the goods are required and that the lessee is relying on the lessor’s skill or judgment to select or furnish suitable goods, there is in the lease contract an implied warranty that the goods will be fit for that purpose.

72A.2140 Exclusion or modification of warranties

Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit a warranty must be construed wherever reasonable as consistent with each other; but, subject to the provisions of ORS 72A.2020 on parol or extrinsic evidence, negation or limitation is inoperative to the extent that the construction is unreasonabl…

72A.2150 Cumulation and conflict of warranties express or implied

Warranties, whether express or implied, must be construed as consistent with each other and as cumulative, but if that construction is unreasonable, the intention of the parties determines which warranty is dominant. In ascertaining that intention, the following rules apply: Exact or technical specifications displace an inconsistent sample or model or gener…

72A.2160 Third-party beneficiaries of express and implied warranties

A warranty to or for the benefit of a lessee under this chapter, whether express or implied, extends to any natural person who is in the family or household of the lessee or who is a guest in the lessee’s home if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty. Th…

72A.2170 Identification

Identification of goods as goods to which a lease contract refers may be made at any time and in any manner explicitly agreed to by the parties. In the absence of explicit agreement, identification occurs: When the lease contract is made if the lease contract is for a lease of goods that are existing and identified; When the goods are shipped, marked or ot…

72A.2180 Insurance and proceeds

A lessee obtains an insurable interest when existing goods are identified to the lease contract even though the goods identified are nonconforming and the lessee has an option to reject them. If a lessee has an insurable interest only by reason of the lessor’s identification of the goods, the lessor, until default or insolvency or notification to the lessee…

72A.2190 Risk of loss

Except in the case of a finance lease, risk of loss is retained by the lessor and does not pass to the lessee. In the case of a finance lease, risk of loss passes to the lessee. Subject to the provisions of ORS 72A.2200 on the effect of default on risk of loss, if risk of loss is to pass to the lessee and the time of passage is not stated, the following rul…

72A.2200 Effect of default on risk of loss

Where risk of loss is to pass to the lessee and the time of passage is not stated: If a tender or delivery of goods so fails to conform to the lease contract as to give a right of rejection, the risk of their loss remains with the lessor or, in the case of a finance lease, the supplier, until cure or acceptance. If the lessee rightfully revokes acceptance,…

72A.2210 Casualty to identified goods

If a lease contract requires goods identified when the lease contract is made, and the goods suffer casualty without fault of the lessee, the lessor or the supplier before delivery, or the goods suffer casualty before risk of loss passes to the lessee pursuant to the lease agreement or ORS 72A.2190, then: If the loss is total, the lease contract is avoided;…

72A.3010 Enforceability of lease contract

Except as otherwise provided in this chapter, a lease contract is effective and enforceable according to its terms between the parties, against purchasers of the goods and against creditors of the parties.

72A.3020 Title to and possession of goods

Except as otherwise provided in this chapter, each provision of this chapter applies whether the lessor or a third party has title to the goods, and whether the lessor, the lessee or a third party has possession of the goods, notwithstanding any statute or rule of law that possession or the absence of possession is fraudulent.

72A.3030 Alienability of party’s interest under lease contract or of lessor’s residual interest in goods; delegation of performance; transfer of rights

As used in this section, “creation of a security interest” includes the sale of a lease contract that is subject to ORS 79A.1090 (1)(c). Except as provided in subsection (3) of this section and ORS 79A.4070, a provision in a lease agreement that prohibits the voluntary or involuntary transfer, including a transfer by sale, sublease, creation or enforcement …

72A.3040 Subsequent lease of goods by lessor

Subject to ORS 72A.3030, a subsequent lessee from a lessor of goods under an existing lease contract obtains, to the extent of the leasehold interest transferred, the leasehold interest in the goods that the lessor had or had power to transfer, and except as provided in subsection (2) of this section and ORS 72A.5270 (4), takes subject to the existing lease …

72A.3050 Sale or sublease of goods by lessee

Subject to the provisions of ORS 72A.3030, a buyer or sublessee from the lessee of goods under an existing lease contract obtains, to the extent of the interest transferred, the leasehold interest in the goods that the lessee had or had power to transfer, and except as provided in subsection (2) of this section and ORS 72A.5110 (4), takes subject to the exis…

72A.3060 Priority of certain liens arising by operation of law

If a person in the ordinary course of the person’s business furnishes services or materials with respect to goods subject to a lease contract, a lien upon those goods in the possession of that person given by statute or rule of law for those materials or services takes priority over any interest of the lessor or lessee under the lease contract or this chapte…

72A.3070 Priority of liens arising by attachment or levy on goods; priority of certain security interests in goods

Except as otherwise provided in ORS 72A.3060, a creditor of a lessee takes subject to the lease contract. Except as otherwise provided in subsection (3) of this section and in ORS 72A.3060 and 72A.3080, a creditor of a lessor takes subject to the lease contract unless the creditor holds a lien that attached to the goods before the lease contract became enfo…

72A.3080 Special rights of creditors

A creditor of a lessor in possession of goods subject to a lease contract may treat the lease contract as void if as against the creditor retention of possession by the lessor is fraudulent under any statute or rule of law, but retention of possession in good faith and current course of trade by the lessor for a commercially reasonable time after the lease c…

72A.3090 Lessor’s and lessee’s rights when goods become fixtures

As used in this section: Goods are “fixtures” when they become so related to particular real estate that an interest in them arises under real estate law; A “fixture filing” is the filing, in the office where a record of a mortgage on the real estate would be filed or recorded, of a financing statement covering goods that are or are to become fixtures and …

72A.3095 Fixture filing recorded and indexed as mortgage

A financing statement filed as a fixture filing under ORS 72A.3090 shall be recorded and indexed as a mortgage on the real estate. ORS 79A.5230 does not apply to a financing statement recorded and indexed as a mortgage under this section.

72A.3100 Lessor’s and lessee’s rights when goods become accessions

Goods are “accessions” when they are installed in or affixed to other goods. The interest of a lessor or a lessee under a lease contract entered into before the goods became accessions is superior to all interests in the whole except as stated in subsection (4) of this section. The interest of a lessor or a lessee under a lease contract entered into at the…

72A.4010 Insecurity; adequate assurance of performance

A lease contract imposes an obligation on each party that the other’s expectation of receiving due performance will not be impaired. If reasonable grounds for insecurity arise with respect to the performance of either party, the insecure party may demand in writing adequate assurance of due performance. Until the insecure party receives that assurance, if c…

72A.4020 Anticipatory repudiation

If either party repudiates a lease contract with respect to a performance not yet due under the lease contract, the loss of which performance will substantially impair the value of the lease contract to the other, the aggrieved party may: For a commercially reasonable time, await retraction of repudiation and performance by the repudiating party; Make dema…

72A.4030 Retraction of anticipatory repudiation

Until the repudiating party’s next performance is due, the repudiating party can retract the repudiation unless, since the repudiation, the aggrieved party has canceled the lease contract or materially changed the aggrieved party’s position or otherwise indicated that the aggrieved party considers the repudiation final. Retraction may be by any method that …

72A.4040 Substituted performance

If without fault of the lessee, the lessor and the supplier, the agreed berthing, loading or unloading facilities fail or the agreed type of carrier becomes unavailable or the agreed manner of delivery otherwise becomes commercially impracticable, but a commercially reasonable substitute is available, the substitute performance must be tendered and accepted.…

72A.4050 Excused performance

Subject to ORS 72A.4040 on substituted performance, the following rules apply: Delay in delivery or nondelivery in whole or in part by a lessor or a supplier who complies with subsections (2) and (3) of this section is not a default under the lease contract if performance as agreed has been made impracticable by the occurrence of a contingency the nonoccurr…

72A.4060 Procedure on excused performance

If the lessee receives notification of a material or indefinite delay or an allocation justified under ORS 72A.4050, the lessee may by written notification to the lessor as to any goods involved, and with respect to all of the goods if under an installment lease contract the value of the whole lease contract is substantially impaired as provided under ORS 72…

72A.4070 Irrevocable promises; finance leases

In the case of a finance lease that is not a consumer lease the lessee’s promises under the lease contract become irrevocable and independent upon the lessee’s acceptance of the goods. A promise that has become irrevocable and independent under subsection (1) of this section: Is effective and enforceable between the parties, and by or against third parties…

72A.5010 Default; procedure

Whether the lessor or the lessee is in default under a lease contract is determined by the lease agreement and this chapter. If the lessor or the lessee is in default under the lease contract, the party seeking enforcement has rights and remedies as provided in this chapter and, except as limited by this chapter, as provided in the lease agreement. If the …

72A.5020 Notice after default

Except as otherwise provided in this chapter or the lease agreement, the lessor or lessee in default under the lease contract is not entitled to notice of default or notice of enforcement from the other party to the lease agreement.

72A.5030 Modification or impairment of rights and remedies

Except as otherwise provided in this chapter, the lease agreement may include rights and remedies for default in addition to or in substitution for those provided in this chapter and may limit or alter the measure of damages recoverable under this chapter. Resort to a remedy provided under this chapter or in the lease agreement is optional unless the remedy…

72A.5040 Liquidation of damages

Damages payable by either party for default, or any other act or omission, including indemnity for loss or diminution of anticipated tax benefits or loss or damage to the lessor’s residual interest, may be liquidated in the lease agreement but only at an amount or by a formula that is reasonable in light of the then anticipated harm caused by the default or …

72A.5050 Cancellation and termination and effect of cancellation, termination, rescission or fraud on rights and remedies

On cancellation of the lease contract, all obligations that are still executory on both sides are discharged, but any right based on prior default or performance survives, and the canceling party also retains any remedy for default of the whole lease contract or any unperformed balance. On termination of the lease contract, all obligations that are still ex…

72A.5060 Statute of limitations

An action for default under a lease contract, including breach of warranty or indemnity, must be commenced within four years after the cause of action accrued. By the original lease contract the parties may reduce the period of limitation to not less than two years. A cause of action for default accrues when the act or omission on which the default or breac…

72A.5070 Proof of market rent; time and place

Damages based on market rent under ORS 72A.5190 or 72A.5280 are determined according to the rent for the use of the goods concerned for a lease term identical to the remaining lease term of the original lease agreement and prevailing at the time of the default. If evidence of rent for the use of the goods concerned for a lease term identical to the remainin…

72A.5080 Lessee’s remedies

If a lessor fails to deliver the goods in conformity to the lease contract as provided in ORS 72A.5090 or repudiates the lease contract as provided in ORS 72A.4020, or a lessee rightfully rejects the goods as provided in ORS 72A.5090 or justifiably revokes acceptance of the goods as provided in ORS 72A.5170, then with respect to any goods involved, and with …

72A.5090 Lessee’s rights on improper delivery; rightful rejection

Subject to the provisions of ORS 72A.5100 on default in installment lease contracts, if the goods or the tender or delivery fail in any respect to conform to the lease contract, the lessee may reject or accept the goods or accept any commercial unit or units and reject the rest of the goods. Rejection of goods is ineffective unless it is within a reasonable…

72A.5100 Installment lease contracts; rejection and default

Under an installment lease contract a lessee may reject any delivery that is nonconforming if the nonconformity substantially impairs the value of that delivery and cannot be cured or the nonconformity is a defect in the required documents. However, if the nonconformity does not fall within subsection (2) of this section and the lessor or the supplier gives …

72A.5110 Merchant lessee’s duties as to rightfully rejected goods

Subject to any security interest of a lessee under ORS 72A.5080, if a lessor or a supplier has no agent or place of business at the market of rejection, a merchant lessee, after rejection of goods in possession or control of the merchant lessee, shall follow any reasonable instructions received from the lessor or the supplier with respect to the goods. In th…

72A.5120 Lessee’s duties as to rightfully rejected goods

Except as otherwise provided in ORS 72A.5110 with respect to goods that threaten to decline in value speedily and subject to any security interest of a lessee under ORS 72A.5080: The lessee, after rejection of goods in the lessee’s possession, shall hold them with reasonable care at the lessor’s or the supplier’s disposition for a reasonable time after the …

72A.5130 Cure by lessor of improper tender or delivery; replacement

If any tender or delivery by the lessor or the supplier is rejected because it is nonconforming and the time for performance has not yet expired, the lessor or the supplier may seasonably notify the lessee of the lessor’s or the supplier’s intention to cure and may then make a conforming delivery within the time provided in the lease contract. If the lessee…

72A.5140 Waiver of lessee’s objections

In rejecting goods, a lessee’s failure to state a particular defect that is ascertainable by reasonable inspection precludes the lessee from relying on the defect to justify rejection or to establish default: If, stated seasonably, the lessor or the supplier could have cured it under ORS 72A.5130; or Between merchants if the lessor or the supplier after re…

72A.5150 Acceptance of goods

Acceptance of goods occurs after the lessee has had a reasonable opportunity to inspect the goods and: The lessee signifies or acts with respect to the goods in a manner that signifies to the lessor or the supplier that the goods are conforming or that the lessee will take or retain them in spite of their nonconformity; or The lessee fails to make an effec…

72A.5160 Effect of acceptance of goods; notice of default; burden of establishing default after acceptance; notice of claim or litigation to person answerable

A lessee must pay rent for any goods accepted in accordance with the lease contract, with due allowance for goods rightfully rejected or not delivered. A lessee’s acceptance of goods precludes rejection of the goods accepted. In the case of a finance lease, if made with knowledge of a nonconformity, acceptance cannot be revoked because of it. In any other c…

72A.5170 Revocation of acceptance of goods

A lessee may revoke acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to the lessee if the lessee has accepted it: Except in the case of a finance lease, on the reasonable assumption that its nonconformity would be cured and it has not been seasonably cured; or Without discovery of the nonconformity if the lessee’s …

72A.5180 Cover; substitute goods

After a default by a lessor under the lease contract of the type described in ORS 72A.5080, or, if agreed, after other default by the lessor, the lessee may cover by making any purchase or lease of or contract to purchase or lease goods in substitution for those due from the lessor. Except as otherwise provided in ORS 72A.5030 with respect to damages liquid…

72A.5190 Lessee’s damages for nondelivery, repudiation, default and breach of warranty in regard to accepted goods

Except as otherwise provided in ORS 72A.5030 with respect to damages liquidated in the lease agreement or otherwise determined pursuant to agreement of the parties under ORS 71.3020 and 72A.5030, if a lessee elects not to cover or a lessee elects to cover and the cover is by lease agreement that for any reason does not qualify for treatment under ORS 72A.518…

72A.5200 Lessee’s incidental and consequential damages

Incidental damages resulting from a lessor’s default include expenses reasonably incurred in inspection, receipt, transportation, and care and custody of goods rightfully rejected or goods the acceptance of which is justifiably revoked, any commercially reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable ex…

72A.5210 Lessee’s right to specific performance or replevin

A judgment requiring specific performance may be entered if the goods are unique or in other proper circumstances. A judgment for specific performance may include any terms and conditions as to payment of the rent, damages or other relief that the court considers just. A lessee has a right of replevin, detinue, sequestration, claim and delivery or the like…

72A.5220 Lessee’s right to goods on lessor’s insolvency

Subject to subsection (2) of this section and even though the goods have not been shipped, a lessee who has paid a part or all of the rent and security for goods identified to a lease contract as provided in ORS 72A.2170 on making and keeping good a tender of any unpaid portion of the rent and security due under the lease contract may recover the goods ident…

72A.5230 Lessor’s remedies

If a lessee wrongfully rejects or revokes acceptance of goods or fails to make a payment when due or repudiates with respect to a part or the whole, then with respect to any goods involved, and with respect to all of the goods if under an installment lease contract the value of the whole lease contract is substantially impaired as provided under ORS 72A.5100…

72A.5240 Lessor’s right to identify goods to lease contract

A lessor aggrieved under ORS 72A.5230 may: Identify to the lease contract conforming goods not already identified if at the time the lessor learned of the default they were in the lessor’s or the supplier’s possession or control; and Dispose of goods as provided in ORS 72A.5270 that demonstrably have been intended for the particular lease contract even tho…

72A.5250 Lessor’s right to possession of goods

If a lessor discovers the lessee to be insolvent, the lessor may refuse to deliver the goods. After a default by the lessee under the lease contract of the type described in ORS 72A.5230 (1) and (3)(a) or, if agreed, after other default by the lessee, the lessor has the right to take possession of the goods. If the lease contract so provides, the lessor may…

72A.5260 Lessor’s stoppage of delivery in transit or otherwise

A lessor may stop delivery of goods in the possession of a carrier or other bailee if the lessor discovers the lessee to be insolvent and may stop delivery of carload, truckload, planeload or larger shipments of express or freight if the lessee repudiates or fails to make a payment due before delivery, whether for rent, security or otherwise under the lease …

72A.5270 Lessor’s rights to dispose of goods

After a default by a lessee under the lease contract of the type described in ORS 72A.5230 or after the lessor refuses to deliver or takes possession of goods as provided in ORS 72A.5250 or 72A.5260, or, if agreed, after other default by a lessee, the lessor may dispose of the goods concerned or the undelivered balance thereof by lease, sale or otherwise. E…

72A.5280 Lessor’s damages for default

Except as otherwise provided with respect to damages liquidated in the lease agreement as provided in ORS 72A.5040 or otherwise determined pursuant to agreement of the parties as provided in ORS 71.3020 and 72A.5030, if a lessor elects to retain the goods or a lessor elects to dispose of the goods and the disposition is by lease agreement that for any reason…

72A.5290 Lessor’s action for the rent

After default by the lessee under the lease contract of the type described in ORS 72A.5230, or, if agreed after other default by the lessee, if the lessor complies with subsection (2) of this section, the lessor may recover from the lessee as damages: For goods accepted by the lessee and not repossessed by or tendered to the lessor and for conforming goods …

72A.5295 Lessor’s recovery for loss of or damage to residual interest in goods

In addition to any other recovery permitted by this chapter or other law, the lessor may recover from the lessee an amount that will fully compensate the lessor for any loss of or damage to the lessor’s residual interest in the goods caused by the default of the lessee.

72A.5300 Lessor’s incidental damages

Incidental damages to an aggrieved lessor include any commercially reasonable charges, expenses or commissions incurred in stopping delivery, in the transportation, care and custody of goods after the lessee’s default, in connection with return or disposition of the goods, or otherwise resulting from the default.

72A.5310 Standing to sue third parties for injury to goods

If a third party so deals with goods that have been identified to a lease contract as to cause actionable injury to a party to the lease contract, the lessor has a right of action against the third party and the lessee also has a right of action against the third party if the lessee: Has a security interest in the goods; Has an insurable interest in the go…