Archives: Leases

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TRAC leases as disguised financing transactions: recent developments and a reminder about TRAC neutral statutes

For many decades, companies in the business of leasing “over-the-road” vehicles such as trucks, tractors, and trailers, have used terminal rental adjustment clause (TRAC) leases to maximize the value they can provide to their customers. Traditionally speaking, TRAC leases combine the tax advantages of leasing with an option to purchase the equipment at the end … Continue Reading

The alternative path to damages in a true lease if liquidated damages are unenforceable (or Lessees, be careful what you wish for!)

Liquidated damages in true leases: applicable law Uniform Commercial Code Section 2-A-504 is the applicable law regarding liquidated damages in a lease agreement. Section 2-A-504(1) provides that: “Damages payable by either party for default . . . including . . . loss or damage to lessor’s residual interest, may be liquidated in the lease agreement … Continue Reading
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