2025 Session Last amended: 1991 session

§ 336.2A-407 — Irrevocable Promises; Finance Leases

Plain-Language Summary

In a finance lease, the lessee's promises under the lease become irrevocable and independent once the lessee accepts the goods. After that point, those promises are enforceable between the parties and against third parties, including assignees, and cannot be canceled, terminated, modified, repudiated, excused, or substituted without the consent of the party they run to. In practical terms, the lessee must keep performing (for example, keep paying rent) even if a problem later arises with the goods. The section also does not affect the validity, under other law, of a lease covenant making the lessee's promises irrevocable and independent on acceptance.

Practical Notes
In a finance lease, once you accept the goods your obligations lock in: you generally must keep paying rent even if the equipment later has problems, and your promises cannot be undone without the other side’s consent. These promises also bind and benefit third parties, such as a company the leasing firm assigns the lease to.