ORS 79.0407¹
UCC 9-407. Restrictions on creation or enforcement of security interest in leasehold interest or in lessor’s residual interest

(1) Except as otherwise provided in subsection (2) of this section, a term in a lease agreement is ineffective to the extent that it:

(a) 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

(b) 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.

(2) Except as otherwise provided in ORS 72A.3030 (Alienability of party’s interest under lease contract or of lessor’s residual interest in goods) (7), a term described in subsection (1)(b) of this section is effective to the extent that there is:

(a) A transfer by the lessee of the lessee’s right of possession or use of the goods in violation of the term; or

(b) A delegation of a material performance of either party to the lease contract in violation of the term.

(3) 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 that 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 ORS 72A.3030 (Alienability of party’s interest under lease contract or of lessor’s residual interest in goods) (4) unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the lessor. [2001 c.445 §69]

Chapter 79

Notes of Decisions

Where creditor with prior perfected secured interest opts not to exercise elective remedies against debtor, creditor maintains security interest and sub­se­quent garnishor takes subject to creditor so that may trace and recapture collateral funds from garnishor. Davis v. F.W. Financial Services, Inc., 260 Or App 191, 317 P3d 916 (2013), Sup Ct review denied

1 Legislative Counsel Committee, CHAPTER 79—Secured Transactions, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors079.­html (2019) (last ac­cessed May 16, 2020).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2019, Chapter 79, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano079.­html (2019) (last ac­cessed May 16, 2020).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent. Currency Information