<html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 57A-2A-305 - Sale or sublease of goods by lessee. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2073316Normal { text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s2073316SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2073316CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2073316Normal-000000 { margin-left: 4.50in; text-indent: -4.00in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-right: 0; margin-bottom: .001pt; } span.s2073316DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } p.s2073316Normal-000001 { margin-left: 1.14in; text-indent: -0.44in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-right: 0; margin-bottom: .001pt; } p.s2073316Normal-000002 { margin-left: 0.70in; text-indent: -0.45in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-right: 0; margin-bottom: .001pt; } span.s2073316000003 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2073316SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2073316SCL-000004 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } body { text-decoration-skip-ink: none; } </style></head><body><div><p dir="ltr" class="s2073316Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=57A-2A-305"><span class="s2073316SENU">57A-2A-305</span></a><span xml:space="preserve" class="s2073316SENU">. </span><span class="s2073316CL">Sale or sublease of goods by lessee.</span></p><p dir="ltr" class="s2073316Normal-000000"><span xml:space="preserve" class="s2073316DefaultParagraphFont">(1)    Subject to the provisions of § </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=57A-2A-303"><span class="s2073316DefaultParagraphFont">57A-2A-303</span></a><span class="s2073316DefaultParagraphFont">, 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 § 57A-2A-511(4), 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:</span></p><p dir="ltr" class="s2073316Normal-000001"><span class="s2073316DefaultParagraphFont">(a)    The lessor was deceived as to the identity of the lessee;</span></p><p dir="ltr" class="s2073316Normal-000001"><span class="s2073316DefaultParagraphFont">(b)    The delivery was in exchange for a check which is later dishonored; or</span></p><p dir="ltr" class="s2073316Normal-000001"><span class="s2073316DefaultParagraphFont">(c)    The delivery was procured through fraud punishable as larcenous under the criminal law.</span></p><p dir="ltr" class="s2073316Normal-000002"><span class="s2073316DefaultParagraphFont">(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's and lessee's rights to the goods, and takes free of the existing lease contract.</span></p><p dir="ltr" class="s2073316Normal-000002"><span class="s2073316DefaultParagraphFont">(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 state or of another jurisdiction takes no greater rights than those provided both by this section and by the certificate of title statute.</span></p><p dir="ltr" class="s2073316Normal"><span xml:space="preserve" class="s2073316000003"> </span></p><p dir="ltr" class="s2073316Normal"><span class="s2073316SCL">Source:</span><span xml:space="preserve" class="s2073316SCL-000004"> SL 1989, ch 419, § 1.</span></p></div></body></html>