                                 CODE OF VIRGINIA

SALE OR SUBLEASE OF GOODS BY LESSEE (§ 8.2A-305)

1. Subject to the provisions of § 8.2A-303, 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 subsection (4) of § 8.2A-511, takes subject to the existing lease contract.
A lessee with a voidable leasehold interest has power to transfer a good
leasehold interest to a good faith buyer for value or a good faith sublessee for
value, but only to the extent set forth in the preceding sentence. When goods
have been delivered under a transaction of lease the lessee has that power even
though:

   a. The lessor was deceived as to the identity of the lessee;

   b. The delivery was in exchange for a check which is later dishonored; or

   c. The delivery was procured through fraud punishable as larcenous under the
   criminal law.

2. A buyer in the ordinary course of business or a sublessee in the ordinary
course of business from a lessee who is a merchant dealing in goods of that kind
to whom the goods were entrusted by the lessor obtains, to the extent of the
interest transferred, all of the lessor&#8217;s and lessee&#8217;s rights to the
goods, and takes free of the existing lease contract.

3. A buyer or sublessee from the lessee of goods that are subject to an existing
lease contract and are covered by a certificate of title issued under a statute
of this Commonwealth or of another jurisdiction takes no greater rights than
those provided both by this section and by the certificate of title statute.

HISTORY: 1991, c. 536.