Section 2-A-305. Sale or Sublease of Goods by Lessee.

(1) Subject to the provisions of Section 2-A-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) and Section 2-A-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:

(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's
and lessee'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 state or of another jurisdiction takes no
greater rights than those provided both by this section and by the
certificate of title statute.