57A-2A-303. Alienability of party's interest under lease contract or of lessor's residual interest in goods; delegation of performance; assignment of rights. (1) Any interest of a party under a lease contract and the lessor's residual interest in the goods may be transferred unless:

(a) Except as provided in subsection (3)(a) of this section, the transfer is voluntary and the lease contract prohibits the transfer; or

(b) Except as provided in subsection (3)(c) or (d) of this section, the transfer materially changes the duty of or materially increases the burden or risk imposed on the other party to the lease contract, and within a reasonable time after notice of the transfer the other party demands that the transferee comply with subsection (2) of this section and the transferee fails to comply.

(2) Within a reasonable time after demand pursuant to subsection (1)(b) of this section, the transferee shall:

(a) Cure or provide adequate assurance that he will promptly cure any default other than one arising from the transfer;

(b) Compensate or provide adequate assurance that he will promptly compensate the other party to the lease contract and any other person holding an interest in the lease contract, except the party whose interest is being transferred, for any loss to that party resulting from the transfer;

(c) Provide adequate assurance of future due performance under the lease contract; and

(d) Assume the lease contract.

(3)(a) No prohibition upon transfer of any interest of a party under a lease contract or the lessor's residual interest in the goods shall invalidate the creation or enforcement of a security interest in any interest of the lessor under a lease contract or the lessor's residual interest in the goods.

(b) Demand pursuant to subsection (1)(b) of this section is without prejudice to the other party's rights against the transferee and the party whose interest is transferred.

(c) Subsection (1)(b) of this section shall not apply to (i) the creation of a security interest in (A) the interest of the lessor under the lease contract or (B) the lessor's residual interest in the goods, or (ii) the exercise of rights as a secured party pursuant to the security interest other than a transfer of the interest of the lessor under the lease contract or the lessor's residual interest in the goods pursuant to § 57A-9-504 or 57A-9-505.

(d) Subsection (1)(b) of this section shall not affect the validity of a provision in a lease contract obligating the lessee to keep the lessee's interest in the lease contract or the goods free from liens or encumbrances.

(4) An assignment of "the lease" or of "all my rights under the lease" or an assignment in similar general terms is a transfer of rights, and unless the language or the circumstances, as in an assignment for security, indicate the contrary, the assignment is a delegation of duties by the assignor to the assignee and acceptance by the assignee constitutes a promise by him to perform those duties. This promise is enforceable by either the assignor or the other party to the lease contract.

(5) Unless otherwise agreed by the lessor and the lessee, no delegation of performance relieves the assignor as against the other party of any duty to perform or any liability for default.

(6) A right to damages for default with respect to the whole lease contract or a right arising out of the assignor's due performance of his entire obligation can be assigned despite agreement otherwise.

(7) To prohibit the transfer of an interest of a party under a lease contract, the language of prohibition must be specific, by a writing, and conspicuous.Source: SL 1989, ch 419, § 1; SL 1990, ch 390, § 8.