Categorizing a transaction as a lease rather than a security interest:
A) has significant implications for the parties and for third parties.
B) has significant implications only for the parties to the transaction.
C) would mean the provisions of Article 9 of the UCC apply to the transaction.
D) would mean the transaction would be governed only by common law.

Question

Quizplus · Accepted Answer

Categorizing a transaction as a lease rather than a security interest affects not only the parties involved in the transaction but also third parties, such as creditors or subsequent buyers, because it determines the legal rights and obligations applicable under the law, including priority rights in bankruptcy or insolvency situations.

Categorizing a Transaction as a Lease Rather Than a Security