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Can you summarize MNST 336.9-407?
UNIFORM COMMERCIAL CODE > RESTRICTIONS ON CREATION OR ENFORCEMENT OF SECURITY INTEREST IN LEASEHOLD INTEREST OR IN LESSOR'S RESIDUAL INTEREST.
Short Summary
This legal document, governed by the Minnesota Statutes under the Uniform Commercial Code, addresses the restrictions on the creation or enforcement of security interests in leasehold interests or lessor’s residual interests. It states that a term in a lease agreement is generally ineffective if it prohibits, restricts, or requires consent for the assignment, transfer, creation, attachment, perfection, or enforcement of a security interest in an interest of a party under the lease contract or in the lessor’s residual interest in the goods. However, certain terms may be effective if there is a violation of the term through the transfer of the lessee’s right of possession or use of the goods or a delegation of material performance. The document clarifies that the creation, attachment, perfection, or enforcement of a security interest does not materially impair the lessee’s prospect of obtaining return performance or materially change the duty, burden, or risk imposed on the lessee unless it results in a delegation of material performance by the lessor.
Whom does it apply to?
Parties involved in lease agreements and security interests in leasehold interests or lessor's residual interests in goods
What does it govern?
Restrictions on creation or enforcement of security interest in leasehold interest or in lessor's residual interest
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No penalties are mentioned.
Jurisdiction
Minnesota