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KANSAS COMMENT, 1996

1. This section sets out the scope of Article 2A; it applies to any transaction that creates a lease, regardless of the form of the transaction. The transactions to which Article 2A applies range from "the lease of a hand tool to an individual for a few hours" to "the leveraged lease of a complex line of industrial equipment to a multi-national organization for a number of years." See Official Comments to this section.

2. "Lease" is defined in section 84-2a-103(1)(j) as a "transfer of the right to possession and use of goods for a term in return for consideration"; but "a sale . . . or retention or creation of a security interest is not a lease." See 84-1-201(37); 1996 Kansas Comment 5 to 84-2a-103. Thus, the scope of this Article is limited to "true" leases that involve goods. (For the definition of "goods" for purposes of Article 2A, see 84-2a-103(1)(h) & 1996 Kansas Comment 4 to 84-2a-103.) Article 2A does not apply to leases of real property.

3. The Official Comments invite courts to consider applying this Article by analogy to bailments or leases of personal property other than goods, "taking into account the expressed intentions of the parties to the transaction and any differences between a lease of goods and a lease of other property." Kansas courts have applied various provisions of Article 2 by analogy to sales not involving goods, see 1996 Kansas Comment 3 to 84-2-102, as well as to leases (before the enactment of Article 2A), see, e.g., Jetz Serv. Co. v. Salina Properties, 19 K.A.2d 144, 865 P.2d 1051 (1993) (laundry equipment lease).

4. Article 2A does not apply to leases entered into prior to February 1, 1992, its effective date in Kansas. See Stewart v. Nationalease of Kansas City, 920 F.Supp. 1188, 1196 n.8 (D. Kan. 1996).

Law Review and Bar Journal References:

"Electronic Commerce in Kansas: Contract Formation and Formalities Under Article 2," Christopher R. Drahozal, 68 J.K.B.A. No. 5, 22 (1999).