(2A-304) Subsequent lease of goods by lessor
N.D. Cent. Code § 41-02.1-34
in effect41-02.1-34. (2A-304) Subsequent lease of goods by lessor
1. Subject to section 41-02.1-33, 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 subsections 2 and 4 of section 41-02.1-75, takes subject to the existing
lease contract. A lessor with voidable title has power to transfer a good leasehold
interest to a good-faith subsequent lessee for value, but only to the extent set forth in
the preceding sentence. When goods have been delivered under a transaction of
purchase, the lessor has that power even though any of the following are met:
a. The lessor's transferor was deceived as to the identity of the lessor.
b. The delivery was in exchange for a check which is later dishonored.
c. It was agreed that the transaction was to be a "cash sale".
d. The delivery was procured through fraud punishable as larcenous under the
criminal law.
2. A subsequent lessee in the ordinary course of business from a lessor who is a
merchant dealing in goods of that kind to whom the goods were entrusted by the
existing lessee of that lessor before the interest of the subsequent lessee became
enforceable against that lessor obtains, to the extent of the leasehold interest
transferred, all of the lessor's and the existing lessee's rights to the goods, and takes
free of the existing lease contract.
3. A subsequent lessee from the lessor of goods that are subject to an existing lease
contract and are covered by a certificate of title issued under a statute of this state or
of another jurisdiction takes no greater rights than those provided both by this section
and by the certificate of title statute.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://ndlegis.gov/cencode/t41c02-1.pdf#nameddest=41-02p1-34Fetched: 10/16/2026