Which statement describes a purpose of UCC Article 2A?

Which statement describes a purpose of UCC Article 2A?

• A. Guards against agency
• B. Distinguishes supplier and funder
• C. Guarantees payment
• D. Requires independent servicing

Answer: (A)

UCC Article 2A is about leasing goods and creating a clear, independent framework for the lessor and lessee to interact. A primary aim is to keep the lease from being mistaken for an agency arrangement between the supplier and the financer, by clearly defining ownership, possession, risk of loss, and the rights and remedies of each party. This separation helps ensure the lease is governed by lease-specific rules rather than being tangled up in agency or secured-loan concepts. The other ideas don’t fit as the main purpose. Article 2A doesn’t guarantee payment or make payment a promise of the law; it also doesn’t impose a universal requirement for independent servicing. While it can involve distinctions between who acts as supplier and who funds the transaction in practice, the central goal is to prevent agency confusion and to establish proper lease-specific relationships and remedies.

UCC Article 2A is about leasing goods and creating a clear, independent framework for the lessor and lessee to interact. A primary aim is to keep the lease from being mistaken for an agency arrangement between the supplier and the financer, by clearly defining ownership, possession, risk of loss, and the rights and remedies of each party. This separation helps ensure the lease is governed by lease-specific rules rather than being tangled up in agency or secured-loan concepts.

The other ideas don’t fit as the main purpose. Article 2A doesn’t guarantee payment or make payment a promise of the law; it also doesn’t impose a universal requirement for independent servicing. While it can involve distinctions between who acts as supplier and who funds the transaction in practice, the central goal is to prevent agency confusion and to establish proper lease-specific relationships and remedies.