"Leases Delivery Necessary to Trigger Business's Payment Obligation"

(This is a common ruling regarding the enforcement of lease contracts, especially

those who do not have “legal language” that allows them to keep monies advanced,

and who rely on their general language of default---meaning if the lease is not

executed-equipment delivery—the contract is not valid. editor )

  ELT News

Leased equipment must be delivered in order to activate a business' obligation to make its monthly payments to the leasing company, even if the business signs an acceptance or risk of loss agreement, the Hawaiian Court of Appeals has ruled. Jaz Inc. sued First Hawaiian Leasing over monthly payments it made on a photo processing machine that was never delivered. Jaz had signed a lease agreement, under which it was obligated to begin making payments upon acceptance of the machine and to take over risk of loss from the vendor. Jaz paid First Hawaiian a total of $13,732 on the $50,000 lease before suing both the vendor and the leasing company for failure to deliver the equipment.

Lender Liability News (03/05/04) Vol. 16, No. 18,