CLFP Chapter 3 - Leasing Law Exam Solution Manual Fully Solved Latest Update 2025 Already Passed
Statutory Law - Answers Includes law enacted by LEGISLATIVE BODIES such as STATE LEGISLATURES and
US CONGRESS
Uniform Commercial Code "UCC" - Answers a body of STATE STATUTORY law
Case Law - Answers Often referred to as COMMON LAW
Cases that apply/interpret statutory law or PRIOR case law PRECEDENTS to particular sets of facts
Regulatory Law - Answers Consists of REGULATIONS ADOPTED by public bodies (ex. IRS, SEC)
Federal Law - Answers Includes laws adopted by US CONGRESS
Internal Revenue Code
Bankruptcy Code
State Law - Answers Includes laws adopted by INDIVIDUAL STATE LEGISLATURES
(UCC, sales tax, property taxes in each state)
Conflicts of Law - Answers refers to INCONSISTENCIES in laws between STATES
("choice of law" provision)
Choice of Law Provision - Answers Lessor can include in their documents the law which will be applied in
any dispute regarding the lease
Contract Law - Answers Includes laws regarding a VOLUNTARY ARRANGEMENT between 2 or more
parties (contract)
Generally a matter of STATE law but CASE law is also important
Requirements for an enforceable contract (4) - Answers 1. Offer and Acceptance
2. Capacity
3. Legality
4. Statue of Frauds
Offer and Acceptance - Answers MUTUAL agreement on principal terms and considerations, or
something of value, GIVEN or PROMISED by each party
Capacity - Answers Each of the parties is LEGALLY ABLE to enter into contract
, Legality - Answers Used to PROHIBIT ENFORCEMENTS of SECURED FINANCING that exceed the legal
usury (rate) limit and PROHIBIT leases of equipment used in ILLEGAL activities (gambling)
Statue of Frauds - Answers Contracts must be memorialized IN WRITING under Article 2A-201, a lease
contract in excess of $1,000 is unenforceable unless in writing
UCC Article 2 - Answers Deals EXCLUSIVELY with the SALES OF GOODS (tangible personal property)
UCC Article 2 - Implied warranties - Answers Lessor deemed to WARRANT that the goods they sell are
MERCHANTABLE (for ordinary purposes and in GOOD CONDITION), fit for the PARTICULAR USE that the
Lessee/Buyer contemplates
UCC Article 9 - Answers Deals exclusively with the creation of SECURITY INTERESTS in personal property
*ONLY for SECURED TRANSACTIONS or SECURED FINANCING, including loans secured by goods as
collateral and leases intended as security
UCC Article 9 NOT applicable for.. - Answers TRUE leases
UCC Article 9 PMSI - Answers Purchase Money Security Interest is given a GRACE PERIOD of 20 DAYS
under state law to file a standard financing statement
PMSI's must be FILED where? - Answers In the STATE where the Lessee is INCORPORATED
PMSI Fixture Financing Statements - Answers Equipment AFFIXED to REAL ESTATE, must be filed in the
LOCAL COUNTY real estate records
Does UCC Article 9 cover ALL types of CLAIMS and equipment? - Answers NO (example: aircraft, vessels)
Are FINANCING STATEMENTS used to PERFECT INTERESTS in MOTOR vehicles and other properties
covered by CERTIFICATE of TITLE? - Answers NO, not UNLESS items are held as INVENTORY
Article 9 Lender and Borrower TERMS - Answers Lender - "SECURED PARTY"
Borrower - "DEBTOR"
Article 9 - Secured Interest - Answers Refers to the INTEREST GRANTED to the lender/lessor and is
similar to a LIEN or other ENCUMBRANCE
Article 2A deals ONLY with what type of Leases? - Answers TRUE leases, aka finance leases
Article 2A - A FINANCE lease is - Answers a TRUE lease with 3 characteristics
Article 2A - 3 Characteristics of a FINANCE lease - Answers a TRUE lease where
1. Lessor is NOT MANUFACTURER or VENDOR (supplier) of leased personal property
2. Lessor DOES NOT SELECT the equipment or lease it from an INVENTORY of LIKE ITEMS
Statutory Law - Answers Includes law enacted by LEGISLATIVE BODIES such as STATE LEGISLATURES and
US CONGRESS
Uniform Commercial Code "UCC" - Answers a body of STATE STATUTORY law
Case Law - Answers Often referred to as COMMON LAW
Cases that apply/interpret statutory law or PRIOR case law PRECEDENTS to particular sets of facts
Regulatory Law - Answers Consists of REGULATIONS ADOPTED by public bodies (ex. IRS, SEC)
Federal Law - Answers Includes laws adopted by US CONGRESS
Internal Revenue Code
Bankruptcy Code
State Law - Answers Includes laws adopted by INDIVIDUAL STATE LEGISLATURES
(UCC, sales tax, property taxes in each state)
Conflicts of Law - Answers refers to INCONSISTENCIES in laws between STATES
("choice of law" provision)
Choice of Law Provision - Answers Lessor can include in their documents the law which will be applied in
any dispute regarding the lease
Contract Law - Answers Includes laws regarding a VOLUNTARY ARRANGEMENT between 2 or more
parties (contract)
Generally a matter of STATE law but CASE law is also important
Requirements for an enforceable contract (4) - Answers 1. Offer and Acceptance
2. Capacity
3. Legality
4. Statue of Frauds
Offer and Acceptance - Answers MUTUAL agreement on principal terms and considerations, or
something of value, GIVEN or PROMISED by each party
Capacity - Answers Each of the parties is LEGALLY ABLE to enter into contract
, Legality - Answers Used to PROHIBIT ENFORCEMENTS of SECURED FINANCING that exceed the legal
usury (rate) limit and PROHIBIT leases of equipment used in ILLEGAL activities (gambling)
Statue of Frauds - Answers Contracts must be memorialized IN WRITING under Article 2A-201, a lease
contract in excess of $1,000 is unenforceable unless in writing
UCC Article 2 - Answers Deals EXCLUSIVELY with the SALES OF GOODS (tangible personal property)
UCC Article 2 - Implied warranties - Answers Lessor deemed to WARRANT that the goods they sell are
MERCHANTABLE (for ordinary purposes and in GOOD CONDITION), fit for the PARTICULAR USE that the
Lessee/Buyer contemplates
UCC Article 9 - Answers Deals exclusively with the creation of SECURITY INTERESTS in personal property
*ONLY for SECURED TRANSACTIONS or SECURED FINANCING, including loans secured by goods as
collateral and leases intended as security
UCC Article 9 NOT applicable for.. - Answers TRUE leases
UCC Article 9 PMSI - Answers Purchase Money Security Interest is given a GRACE PERIOD of 20 DAYS
under state law to file a standard financing statement
PMSI's must be FILED where? - Answers In the STATE where the Lessee is INCORPORATED
PMSI Fixture Financing Statements - Answers Equipment AFFIXED to REAL ESTATE, must be filed in the
LOCAL COUNTY real estate records
Does UCC Article 9 cover ALL types of CLAIMS and equipment? - Answers NO (example: aircraft, vessels)
Are FINANCING STATEMENTS used to PERFECT INTERESTS in MOTOR vehicles and other properties
covered by CERTIFICATE of TITLE? - Answers NO, not UNLESS items are held as INVENTORY
Article 9 Lender and Borrower TERMS - Answers Lender - "SECURED PARTY"
Borrower - "DEBTOR"
Article 9 - Secured Interest - Answers Refers to the INTEREST GRANTED to the lender/lessor and is
similar to a LIEN or other ENCUMBRANCE
Article 2A deals ONLY with what type of Leases? - Answers TRUE leases, aka finance leases
Article 2A - A FINANCE lease is - Answers a TRUE lease with 3 characteristics
Article 2A - 3 Characteristics of a FINANCE lease - Answers a TRUE lease where
1. Lessor is NOT MANUFACTURER or VENDOR (supplier) of leased personal property
2. Lessor DOES NOT SELECT the equipment or lease it from an INVENTORY of LIKE ITEMS
