Printable Format84-2a-201. Statute of frauds. (1) A lease contract is not enforceable by way of action or defense unless:
(a) The total payments to be made under the lease contract, excluding payments for options to renew or buy, are less than $1,000; or
(b) there is a writing, signed by the party against whom enforcement is sought or by that party's authorized agent, sufficient to indicate that a lease contract has been made between the parties and to describe the goods leased and the lease term.
(2) Any description of leased goods or of the lease term is sufficient and satisfies subsection (1)(b), whether or not it is specific, if it reasonably identifies what is described.
(3) A writing is not insufficient because it omits or incorrectly states a term agreed upon, but the lease contract is not enforceable under subsection (1)(b) beyond the lease term and the quantity of goods shown in the writing.
(4) A lease contract that does not satisfy the requirements of subsection (1), but which is valid in other respects, is enforceable:
(a) If the goods are to be specially manufactured or obtained for the lessee and are not suitable for lease or sale to others in the ordinary course of the lessor's business, and the lessor, before notice of repudiation is received and under circumstances that reasonably indicate that the goods are for the lessee, has made either a substantial beginning of their manufacture or commitments for their procurement;
(b) if the party against whom enforcement is sought admits in that party's pleading, testimony or otherwise in court that a lease contract was made, but the lease contract is not enforceable under this provision beyond the quantity of goods admitted; or
(c) with respect to goods that have been received and accepted by the lessee.
(5) The lease term under a lease contract referred to in subsection (4) is:
(a) If there is a writing signed by the party against whom enforcement is sought or by that party's authorized agent specifying the lease term, the term so specified;
(b) if the party against whom enforcement is sought admits in that party's pleading, testimony, or otherwise in court a lease term, the term so admitted; or
(c) a reasonable lease term.
History: L. 1991, ch. 295, ยง 10; February 1, 1992.
KANSAS COMMENT, 1996
1. This section contains the statute of frauds for lease transactions, which is based on the Article 2 statute of frauds. See 84-2-201. The section makes several changes to the Article 2 model. First, paragraph (1)(a) increases to $1,000 the contract amount that triggers the writing requirement: a writing is required when the total payments to be made under a lease contract total $1,000 or more. Second, paragraph (1)(b) demands greater detail in the required writing, borrowing from 84-9-203(1)(a). Like section 84-2-201, to satisfy the statute the writing must be signed by the party against whom enforcement is sought and must be sufficient to evidence the existence of a contract. Paragraph (1)(b) requires, in addition, that the writing describe the goods leased and the term of the lease. Subsection (2) borrows from section 84-9-110 and provides that the necessary description of the goods or the lease term is sufficient "whether or not it is specific, if it reasonably identifies what is described." Subsection (3) states that omission or misstatement of a term does not make a writing insufficient, but that any lease contract is not enforceable beyond the quantity of goods and the lease term in the writing.
2. The statutory exceptions from the statute of frauds also differ from the statutory analogue. The merchants exception of 84-2-201(2) is omitted altogether. The Official Comments to this section explain that the number of lease transactions using confirmatory memoranda "was thought to be modest." The part performance exception of section 84-2-201(3)(c) is modified so that partial payment does not take the contract out of the statute of frauds. The rationale stated in the Official Comments is that payment of rent, unlike payment of the purchase price for goods, is not "as a matter of policy" a sufficient substitute for a writing. Paragraph (4)(c) maintains the other half of the part performance exception, providing that a lease contract is enforceable without a writing to the extent of goods received and accepted by the lessee. Paragraph (4)(a) likewise continues the exception for specially manufactured goods, and paragraph (4)(b) continues the admissions exception, both without substantial change. See 1996 Kansas Comments 5 & 6 to 84-2-201 for further discussion.
3. The exceptions in paragraphs (4)(b) and (c) make a lease contract enforceable without a writing to the extent of the quantity of goods accepted or admitted. However, in such a case, as well as under paragraph (4)(a), the term of the lease remains to be determined. Subsection (5) specifies that the lease term in such a case is the term shown by a writing, the term admitted in court, or a reasonable term.