What Are Vehicle Lease Requirements in Pennsylvania?
Full Question:
Answer:
The form as written may be legally enforced in Pennsylvania. Please see the statutes below to determine enforceability of any modifications you include.
Please see the following PA statutes to determine applicability:
13 Pa.C.S.A. § 2A103. Definitions and index of definitions
(a) Definitions. — The following words and phrases when used in this
division shall have, unless the context clearly indicates otherwise, the
meanings given to them in this subsection:
"Buyer in ordinary course of business." A person who, in good faith and
without knowledge that the sale to him 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 selling
goods of that kind but does not include a pawnbroker. "Buying" may be for
cash or by exchange of other property or on secured or unsecured credit and
includes receiving goods or documents of title under a preexisting contract
for sale but does not include a transfer in bulk or as security for or in
total or partial satisfaction of a money debt.
"Cancellation." Occurs when either party puts an end to the lease
contract for default by the other party.
"Commercial unit." Such a unit of goods as by commercial usage is a
single whole for purposes of lease and division of which materially impairs
its character or value on the market or in use. A commercial unit may be a
single article, as a machine, or a set of articles, as a suite of furniture
or a line of machinery, or a quantity, as a gross or carload, or any other
unit treated in use or in the relevant market as a single whole.
"Conforming." Conforming goods or performance under a lease contract
means goods or performance that are in accordance with the obligations under
the lease contract.
"Consumer lease." A lease that a lessor regularly engaged in the business
of leasing or selling makes to a lessee who is an individual and who takes
under the lease primarily for a personal, family or household purpose, if
the total payments to be made under the lease contract, excluding payments
for options to renew or buy, do not exceed $25,000.
"Fault." Wrongful act, omission, breach or default.
"Finance lease." A lease with respect to which:
(1) the lessor does not select, manufacture or supply the goods;
(2) the lessor acquires the goods or the right to possession and use of
the goods in connection with the lease; and
(3) one of the following occurs:
(i) the lessee receives a copy of the contract by which the lessor
acquired the goods or the right to possession and use of the goods
before signing the lease contract;
(ii) the lessee's approval of the contract by which the lessor acquired
the goods or the right to possession and use of the goods is a condition
to effectiveness of the lease contract;
(iii) the lessee, before signing the lease contract, receives an accurate
and complete statement designating the promises and warranties, and any
disclaimers of warranties, limitations or modifications of remedies, or
liquidated damages, including those of a third party, such as the
manufacturer of the goods, provided to the lessor by the person supplying
the goods in connection with or as part of the contract by which the lessor
acquired the goods or the right to possession and use of the goods; or
(iv) if the lease is not a consumer lease, the lessor, before the lessee
signs the lease contract, informs the lessee, in writing:
(A) of the identity of the person supplying the goods to the lessor,
unless the lessee has selected that person and directed the lessor to
acquire the goods or the right to possession and use of the goods from
that person;
(B) that the lessee is entitled under this division to the promises and
warranties, including those of any third party, provided to the lessor
by the person supplying the goods in connection with or as part of
the contract by which the lessor acquired the goods or the right to
possession and use of the goods; and
(C) that the lessee may communicate with the person supplying the goods
to the lessor and receive an accurate and complete statement of those
promises and warranties, including any disclaimers and limitations of
them or of remedies.
"Goods." All things that are movable at the time of identification to the
lease contract, or are fixtures (section 2A309), but the term does not
include money, documents, instruments, accounts, chattel paper, general
intangibles, or minerals or the like, including oil and gas, before
extraction. The term also includes the unborn young of animals.
"Installment lease contract." A lease contract that authorizes or
requires the delivery of goods in separate lots to be separately accepted,
even though the lease contract contains a clause "each delivery is a
separate lease" or its equivalent.
"Lease." A transfer of the right to possession and use of goods for
a term in return for consideration, but a sale, including a sale on approval
or a sale or return, or retention or creation of a security interest is not
a lease. Unless the context clearly indicates otherwise, the term includes
a sublease.
"Lease agreement." The bargain, with respect to the lease, of the lessor
and the lessee in fact as found in their language or by implication from
other circumstances including course of dealing or usage of trade or course
of performance as provided in this division. Unless the context clearly
indicates otherwise, the term includes a sublease agreement.
"Lease contract." The total legal obligation that results from the lease
agreement as affected by this division and any other applicable rules of
law. Unless the context clearly indicates otherwise, the term includes a
sublease contract.
"Leasehold interest." The interest of the lessor or the lessee under a
lease contract.
"Lessee." A person who acquires the right to possession and use of goods
under a lease. Unless the context clearly indicates otherwise, the term
includes a sublessee.
"Lessee in ordinary course of business." A person who, in good faith and
without knowledge that the lease to him is in violation of the ownership
rights or security interest or leasehold interest of a third party in the
goods, leases in ordinary course from a person in the business of selling or
leasing goods of that kind but does not include a pawnbroker. "Leasing" may
be for cash or by exchange of other property or on secured or unsecured
credit and includes receiving goods or documents of title under a
preexisting lease contract but does not include a transfer in bulk or as
security for or in total or partial satisfaction of a money debt.
"Lessor." A person who transfers the right to possession and use of goods
under a lease. Unless the context clearly indicates otherwise, the term
includes a sublessor.
"Lessor's residual interest." The lessor's interest in the goods after
expiration, termination or cancellation of the lease contract.
"Lien." A charge against or interest in goods to secure payment of a debt
or performance of an obligation, but the term does not include a security
interest.
"Lot." A parcel or a single article that is the subject matter of a
separate lease or delivery, whether or not it is sufficient to perform the
lease contract.
"Merchant lessee." A lessee that is a merchant with respect to goods of
the kind subject to the lease.
"Present value." The amount as of a date certain of one or more sums
payable in the future, discounted to the date certain. The discount is
determined by the interest rate specified by the parties if the rate was
not manifestly unreasonable at the time the transaction was entered into;
otherwise, the discount is determined by a commercially reasonable rate that
takes into account the facts and circumstances of each case at the time the
transaction was entered into.
"Purchase." Includes taking by sale, lease, mortgage, security interest,
pledge, gift or any other voluntary transaction creating an interest in
goods.
"Sublease." A lease of goods the right to possession and use of which was
acquired by the lessor as a lessee under an existing lease.
"Supplier." A person from whom a lessor buys or leases goods to be leased
under a finance lease.
"Supply contract." A contract under which a lessor buys or leases goods
to be leased.
"Termination." Occurs when either party pursuant to a power created by
agreement or law puts an end to the lease contract otherwise than for
default.
(b) Index of other definitions in division. — Other definitions applying
to this division and the sections in which they appear are:
"Accessions." Section 2A310(a).
"Construction mortgage." Section 2A309(a).
"Encumbrance." Section 2A309(a).
"Fixture filing." Section 2A309(a).
"Fixtures." Section 2A309(a).
"Purchase money lease." Section 2A309(a).
(c) Index of definitions in other divisions. — The following definitions
in other divisions apply to this division:
"Account." Section 9102(a).
"Between merchants." Section 2104.
"Buyer." Section 2103(a).
"Chattel paper." Section 9102(a).
"Consumer goods." Section 9102(a).
"Document." Section 9102(a).
"Entrusting." Section 2403(c).
"General intangible." Section 9102(a)
"Good faith." Section 2103(a).
"Instrument." Section 9102(a).
"Merchant." Section 2104.
"Mortgage." Section 9102(a).
"Pursuant to commitment." Section 9102(a).
"Receipt." Section 2103(a).
"Sale." Section 2106(a).
"Sale on approval." Section 2326.
"Sale or return." Section 2326.
"Seller." Section 2103(a).
(d) Applicability of general definitions and principles. — In addition,
Division 1 (relating to general provisions) contains general definitions
and principles of construction and interpretation applicable throughout
this division.
13 Pa.C.S.A. § 2A106. Limitation on power
of parties to consumer lease to choose applicable law and judicial
forum
(a) Choice of law. — If the law chosen by the parties to a
consumer lease is that of a jurisdiction other than a
jurisdiction in which the lessee 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.
(b) Choice of judicial forum. — If the judicial forum chosen
by the parties to a consumer lease is a forum that would not
otherwise have jurisdiction over the lessee, the choice is not
enforceable.
13 Pa.C.S.A. § 2A108. Unconscionability
(a) Unconscionable lease. — 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
any unconscionable result.
(b) Unconscionable conduct. — With respect to a consumer
lease, if the court as a matter of law finds that a lease
contract or any clause of a lease contract has been induced by
unconscionable conduct or that unconscionable conduct has
occurred in the collection of a claim arising from a lease
contract, the court may grant appropriate relief.
(c) Evidence by parties. — Before making a finding of
unconscionability under subsection (a) or (b), the court, on its
own motion or that of a party, shall afford the parties a
reasonable opportunity to present evidence as to the setting,
purpose and effect of the lease contract, or clause thereof, or
of the conduct.
(d) Award of attorney fees. — In an action in which the lessee
claims unconscionability with respect to a consumer lease:
(1) If the court finds unconscionability under
subsection (a) or (b), the court shall award reasonable attorney fees to
the lessee.
(2) If the court does not, find unconscionability and the
lessee claiming unconscionability has brought or maintained
an action he knew to be groundless, the court shall award
reasonable attorney fees to the party against whom the claim
is made.
(3) In determining attorney fees, the amount of the
recovery on behalf of the claimant under subsections (a) and
(b) is not controlling.
13 Pa.C.S.A. § 2A109. Option to accelerate at will
(a) General rule. — A term providing that one party or his
successor in interest may accelerate payment or performance or
require collateral or additional collateral "at will" or "when he
deems himself insecure" or in words of similar import must be
construed to mean that he has power to do so only if he in good
faith believes that the prospect of payment or performance is
impaired.
(b) Burden of proof. — With respect to a consumer lease, the
burden of establishing good faith under subsection (a) is on the
party who exercised the power; otherwise, the burden of
establishing lack of good faith is on the party against whom the
power has been exercised.
13 Pa.C.S.A. § 2A204. Formation in general
(a) General rule. — 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.
(b) Effect of undetermined time of making agreement. — An
agreement sufficient to constitute a lease contract may be found
although the moment of its making is undetermined.
(c) Effect of open terms. — Although one or more terms are
left open, a lease contract does not fail for indefiniteness if
the parties have intended to make a lease contract and there is a
reasonably certain basis for giving an appropriate remedy.
13 Pa.C.S.A. § 2A206. Offer and acceptance in formation of lease contract
(a) General rule. — 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.
(b) Beginning requested performance without notice. — If the
beginning of a requested performance is a reasonable mode of
acceptance, an offeror who is not notified of acceptance within a
reasonable time may treat the offer as having lapsed before
acceptance.
13 Pa.C.S.A. § 2A301. Enforceability of lease contract
Except as otherwise provided in this division, 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.
13 Pa.C.S.A. § 2A218. Insurance and proceeds
(a) Insurable interest of lessee. — 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.
(b) Substitution of goods by lessor. — 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 that identification is final, may
substitute other goods for those identified.
(c) Duration of insurable interest of lessor. —
Notwithstanding a lessee's insurable interest under
subsections (a) and (b), the lessor retains an insurable interest until an
option to buy has been exercised by the lessee and risk of loss
has passed to the lessee.
(d) Other insurable interests unimpaired. — Nothing in this
section impairs any insurable interest recognized under any other
statute or rule of law.
(e) Agreement to determine obligations of parties. — The
parties by agreement may determine that one or more parties have
an obligation to obtain and pay for insurance covering the goods
and by agreement may determine the beneficiary of the proceeds of
the insurance.
13 Pa.C.S.A. § 2A212. Implied warranty of merchantability
(a) General rule. — 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.
(b) Merchantability standards for goods. — Goods to be
merchantable must be at least such as:
(1) pass without objection in the trade under the
description in the lease agreement;
(2) in the case of fungible goods, are of fair average
quality within the description;
(3) are fit for the ordinary purposes for which goods of
that type are used;
(4) run, within the variation permitted by the lease
agreement, of even kind, quality and quantity within each
unit and among all units involved;
(5) are adequately contained, packaged and labeled as the
lease agreement may require; and
(6) conform to any promises or affirmations of fact made on
the container or label.
(c) Course of dealing or usage of trade. — Other implied
warranties may arise from course of dealing or usage of trade.