2012 Pennsylvania Consolidated Statutes
Title 13 - COMMERCIAL CODE
Chapter 94 - Rights of Third Parties
Section 9407 - Restrictions on creation or enforcement of security interest in leasehold interest or in lessor's residual interest

     § 9407.  Restrictions on creation or enforcement of security
                interest in leasehold interest or in lessor's
                residual interest.
        (a)  Term restricting assignment generally ineffective.--
     Except as otherwise provided in subsection (b), a term in a
     lease agreement is ineffective to the extent that it:
            (1)  prohibits, restricts or requires the consent of a
        party to the lease to the assignment or transfer of, or the
        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; or
            (2)  provides that the assignment or transfer or the
        creation, attachment, perfection or enforcement of the
        security interest may give rise to a default, breach, right
        of recoupment, claim, defense, termination, right of
        termination or remedy under the lease.
        (b)  Effectiveness of certain terms.--Except as otherwise
     provided in section 2A303(g) (relating to requirements for
     prohibition of transfer in consumer lease), a term described in
     subsection (a)(2) is effective to the extent that there is:
            (1)  a transfer by the lessee of the lessee's right of
        possession or use of the goods in violation of the term; or
            (2)  a delegation of a material performance of either
        party to the lease contract in violation of the term.
        (c)  Security interest not material impairment.--The
     creation, attachment, perfection or enforcement of a security
     interest in the lessor's interest under the lease contract or
     the lessor's residual interest in the goods is not a transfer
     which materially impairs the lessee's prospect of obtaining
     return performance or materially changes the duty of or
     materially increases the burden or risk imposed on the lessee
     within the purview of section 2A303(d) (relating to certain
     rights and remedies) unless, and then only to the extent that,
     enforcement actually results in a delegation of material
     performance of the lessor.

        Cross References.  Section 9407 is referred to in sections
     2A303, 9401, 9406 of this title.