2019 -- S 0083

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LC000548

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO ANIMALS AND ANIMAL HUSBANDRY -- ANIMAL CARE -- UNIFORM

COMMERCIAL CODE -- LEASES

     Introduced By: Senators Crowley, and Seveney

     Date Introduced: January 16, 2019

     Referred To: Senate Judiciary

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 6A-2.1-103 and 6A-2.1-217 of the General Laws in Chapter 6A-

2.1 entitled "Leases" are hereby amended to read as follows:

     6A-2.1-103. Definitions and index of definitions.

     (1) In this chapter unless the context otherwise requires:

     (a) "Buyer in ordinary course of business" means a person who in good faith and without

knowledge that the sale to him or her is in violation of the ownership rights or security interest or

leasehold interest of a third party in the goods buys in ordinary course from a person in the

business of selling goods of that kind but does not include a pawnbroker. "Buying" may be for

cash or by exchange of other property or on secured or unsecured credit and includes acquiring

goods or documents of title under a preexisting contract for sale but does not include a transfer in

bulk or as security for or in total or partial satisfaction of a money debt.

     (b) "Cancellation" occurs when either party puts an end to the lease contract for default

by the other party.

     (c) "Commercial unit" means such a unit of goods as by commercial usage is a single

whole for purposes of lease and division of which materially impairs its character or value on the

market or in use. A commercial unit may be a single chapter, as a machine, or a set of chapters, as

a suite of furniture or a line of machinery, or a quantity, as a gross or carload, or any other unit

treated in use or in the relevant market as a single whole.

     (d) "Conforming" goods or performance under a lease contract means goods or

performance that are in accordance with the obligations under the lease contract.

     (e) "Consumer lease" means a lease that a lessor regularly engaged in the business of

leasing or selling makes to a lessee who is an individual and who takes under the lease primarily

for a personal, family, or household purpose.

     (f) "Fault" means wrongful act, omission, breach, or default.

     (g) "Finance lease" means a lease with respect to which:

     (i) The lessor does not select, manufacture, or supply the goods;

     (ii) The lessor acquires the goods or the right to possession and use of the goods in

connection with the lease; and

     (iii) One of the following occurs:

     (A) The lessee receives a copy of the contract by which the lessor acquired the goods or

the right to possession and use of the goods before signing the lease contract;

     (B) The lessee's approval of the contract by which the lessor acquired the goods or the

right to possession and use of the goods is a condition to effectiveness of the lease contract;

     (C) The lessee, before signing the lease contract, receives an accurate and complete

statement designating the promises and warranties, and any disclaimers of warranties, limitations

or modifications of remedies, or liquidated damages, including those of a third party, such as the

manufacturer of the goods, provided to the lessor by the person supplying the goods in connection

with or as part of the contract by which the lessor acquired the goods or the right to possession

and use of the goods; or

     (D) If the lease is not a consumer lease, the lessor, before the lessee signs the lease

contract, informs the lessee in writing (a) of the identity of the person supplying the goods to the

lessor, unless the lessee has selected that person and directed the lessor to acquire the goods or the

right to possession and use of the goods from that person, (b) that the lessee is entitled under this

chapter to the promises and warranties, including those of any third party, provided to the lessor

by the person supplying the goods in connection with or as part of the contract by which the

lessor acquired the goods or the right to possession and use of the goods, and (c) that the lessee

may communicate with the person supplying the goods to the lessor and receive an accurate and

complete statement of those promises and warranties, including any disclaimers and limitations of

them or of remedies.

     (h) "Goods" means all things that are movable at the time of identification to the lease

contract, or are fixtures (§ 6A-2.1-309), but the term does not include money, documents,

instruments, accounts, chattel paper, general intangibles, or minerals or the like, including oil and

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gas, before extraction. The term also includes the unborn young of animals with the exception of

unborn dogs and cats pursuant to § 4-19-23.

     (i) "Installment lease contract" means a lease contract that authorizes or requires the

delivery of goods in separate lots to be separately accepted, even though the lease contract

contains a clause "each delivery is a separate lease" or its equivalent.

     (j) "Lease" means a transfer of the right to possession and use of goods for a term in

return for consideration, but a sale, including a sale on approval or a sale or return, or retention or

creation of a security interest is not a lease. Unless the context clearly indicates otherwise, the

term includes a sublease.

     (k) "Lease agreement" means the bargain, with respect to the lease, of the lessor and the

lessee in fact as found in their language or by implication from other circumstances including

course of dealing or usage of trade or course of performance as provided in this chapter. Unless

the context clearly indicates otherwise, the term includes a sublease agreement.

     (l) "Lease contract" means the total legal obligation that results from the lease agreement

as affected by this chapter and any other applicable rules of law. Unless the context clearly

indicates otherwise, the term includes a sublease contract.

     (m) "Leasehold interest" means the interest of the lessor or the lessee under a lease

contract.

     (n) "Lessee" means a person who acquires the right to possession and use of goods under

a lease. Unless the context clearly indicates otherwise, the term includes a sublessee.

     (o) "Lessee in ordinary course of business" means a person who in good faith and without

knowledge that the lease to him or her is in violation of the ownership rights or security interest

or leasehold interest of a third party in the goods leases in ordinary course from a person in the

business of selling or leasing goods of that kind but does not include a pawnbroker. "Leasing"

may be for cash or by exchange of other property or on secured or unsecured credit and includes

acquiring goods or documents of title under a preexisting lease contract but does not include a

transfer in bulk or as security for or in total or partial satisfaction of a money debt.

     (p) "Lessor" means a person who transfers the right to possession and use of goods under

a lease. Unless the context clearly indicates otherwise, the term includes a sublessor.

     (q) "Lessor's residual interest" means the lessor's interest in the goods after expiration,

termination, or cancellation of the lease contract.

     (r) "Lien" means a charge against or interest in goods to secure payment of a debt or

performance of an obligation, but the term does not include a security interest.

     (s) "Lot" means a parcel or a single chapter that is the subject matter of a separate lease or

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delivery, whether or not it is sufficient to perform the lease contract.

     (t) "Merchant lessee" means a lessee that is a merchant with respect to goods of the kind

subject to the lease.

     (u) "Present value" means the amount as of a date certain of one or more sums payable in

the future, discounted to the date certain. The discount is determined by the interest rate specified

by the parties if the rate was not manifestly unreasonable at the time the transaction was entered

into; otherwise, the discount is determined by a commercially reasonable rate that takes into

account the facts and circumstances of each case at the time the transaction was entered into.

     (v) "Purchase" includes taking by sale, lease, mortgage, security interest, pledge, gift, or

any other voluntary transaction creating an interest in goods.

     (w) "Sublease" means a lease of goods the right to possession and use of which was

acquired by the lessor as a lessee under an existing lease.

     (x) "Supplier" means a person from whom a lessor buys or leases goods to be leased

under a finance lease.

     (y) "Supply contract" means a contract under which a lessor buys or leases goods to be

leased.

     (z) "Termination" occurs when either party pursuant to a power created by agreement or

law puts an end to the lease contract otherwise than for default.

     (2) Other definitions applying to this chapter and the sections in which they appear are:

     "Accessions". § 6A-2.1-310(1).

     "Construction mortgage". § 6A-2.1-309(1)(d).

     "Encumbrance". § 6A-2.1-309(1)(e).

     "Fixtures". § 6A-2.1-309(1)(a).

     "Fixture filing". § 6A-2.1-309(1)(b).

     "Purchase money lease". § 6A-2.1-309(1)(c).

     (3) The following definitions in other chapters apply to this Chapter:

     "Account". § 6A-9-102(a)(2).

     "Between merchants". § 6A-2-104(3).

     "Buyer". § 6A-2-103(1)(a).

     "Chattel paper". § 6A-9-102(a)(11).

     "Consumer goods". § 6A-9-102(a)(23).

     "Document". § 6A-9-102(a)(30).

     "Entrusting". § 6A-2-403(3).

     "General intangibles". § 6A-9-102(a)(42).

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     "Good faith". § 6A-2-103(1)(b).

     "Instrument". § 6A-9-102(a)(47).

     "Merchant". § 6A-2-104(1).

     "Mortgage". § 6A-9-102(a)(55).

     "Pursuant to commitment". § 6A-9-102(a)(69).

     "Receipt". § 6A-2-103(1)(c).

     "Sale". § 6A-2-106(1).

     "Sale on approval". § 6A-2-326.

     "Sale or return". § 6A-2-326.

     "Seller". § 6A-2-103(1)(d).

     (4) In addition, chapter 1 of this title contains general definitions and principles of

construction and interpretation applicable throughout this chapter.

     6A-2.1-217. Identification.

     Identification of goods as goods to which a lease contract refers may be made at any time

and in any manner explicitly agreed to by the parties. In the absence of explicit agreement,

identification occurs:

     (a) When the lease contract is made if the lease contract is for a lease of goods that are

existing and identified;

     (b) When the goods are shipped, marked, or otherwise designated by the lessor as goods

to which the lease contract refers, if the lease contract is for a lease of goods that are not existing

and identified; or

     (c) When the young are conceived, if the lease contract is for a lease of unborn young of

animals with the exception of unborn dogs and cats pursuant to § 4-19-23.

     SECTION 2. Chapter 4-19 of the General Laws entitled "Animal Care" is hereby

amended by adding thereto the following section:

     4-19-23. Prohibited contracts for the purchase of dogs or cats.

     (a) No contract for the purchase of a dog or a cat or the financing of such purchase shall

include any provisions which authorize the use of a dog or a cat as security where such dog or cat

may be repossessed by the seller or lender contingent on the purchaser making payments under

such contract. Provided, however, nothing in this section shall prohibit the purchase of a dog or

cat through an unsecured loan.

     (b) The protections and rights established by this section shall not apply to such

agricultural activities, uses or operations set forth in chapter 23 of title 2, nor those portions of the

rules and regulations promulgated by the secretary of the United States Department of

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Agriculture and adopted by the director, pursuant to the provisions of the Animal Welfare Act, 7

U.S.C. § 2131 et seq.

     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO ANIMALS AND ANIMAL HUSBANDRY -- ANIMAL CARE -- UNIFORM

COMMERCIAL CODE -- LEASES

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     This act would prohibit the use of a dog or cat as security for its purchase where the seller

or lender can repossess the dog or cat for failure to make payments. This act would also provide

exceptions for certain agricultural activities.

     This act would take effect upon passage.

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