The uniform commercial code survey: leases

The uniform commercial code survey: leases

The uniform commercial code survey

Over $215 billion in equipment lease transactions occur annually, accounting for roughly one-third of all capital investment each year in the United States. (1)


Within the last few months, the Chair and Reporter of the Drafting Committee approved a set of new clarifying Official Comments on revised U.C.C. Article 2A. (2) These new comments on Article 2A spell out more explicitly how and why commercial leasing law differs from sales law. (3)

Opposition remains to the proposed revisions to U.C.C. Articles 1, 2, and 2A, and to the Uniform Computer Information Transactions Act (UCITA). Supporters of the proposed amendments to Articles 2 and 2A are considering how best to proceed in order to avoid the same fate as UCITA, which now seems dead. (4) The Code’s history (5) suggests that it would be useful for the Commissioners on Uniform State Laws and the Permanent Editorial Board to issue a written response addressing the criticisms that have stalled the proposed amendments. This might lead to significant clarification and modification, improved public understanding, and greater acceptability of the proposed amendments.



Two recent court decisions addressed issues of lease contract formation. In Cobra Capital, LLC v. RF Nitro Communications, Inc., (6) the court held that the terms of a “Lease Financing Proposal” showed that it was not intended by the parties to be a binding contract. (7) On its face, the proposal indicated that it was subject to the approval and was not considered to be a commitment

In Fairbrook Leasing, Inc. v. Mesaba Aviation, Inc., (10) the court held that a preliminary aircraft lease agreement was a binding contract, notwithstanding the existence of some open terms. (11) Twenty-three planes were in fact leased under a term sheet that set forth the basics of the deal, including the type and number of aircraft, rental rates, configurations, delivery dates, and a range of acceptable lease terms. The term sheet left open arrangements for negotiating individual subleases subject to those terms. The court said that, under New York law, there was a strong presumption against finding binding obligations in an agreement with open terms. (12) It found, however, that the term sheet established a framework for agreement, bound the parties to negotiate in good faith within that framework, granted one party the authority to determine the duration of subleases within a range, and was otherwise “sufficiently definite” to enforce. (13)


True leases are distinguished from sales for many purposes in the law. (14) In general, the standards in U.C.C. section 1-201(37) provide a core set of rules for identifying a true lease. These widely referenced standards apply in every state and are influential in federal and international law settings as well. (15) Given its pervasive importance, it is not surprising that the single most heavily litigated issue in the equipment-leasing field is whether a transaction is a true lease.

In re Pillowtex (16) involved a purported lease transaction in which Duke agreed to provide and install energy-saving light fixtures on the premises of several Pillowtex plants. Duke installed the energy-saving equipment at no cost in exchange for receiving, over a period of eight years, monthly payments representing the amount of Pillowtex’s monthly energy savings. Title to the equipment remained with Duke. The “full payout” agreement barred Pillowtex from terminating the arrangement before it paid Duke the full cost of the energy fixtures. The equipment’s useful life extended more than twelve years beyond the term of the agreement. There was no option to renew the lease nor was Pillowtex required to purchase the equipment at the end of the term. The agreement did not require Pillowtex to return the equipment at the end of the term. Instead, Duke had several end-of-term options, though the court determined that these options were structured so that the lessee could “effectively compel Duke to abandon the [e]nergy [f]ixtures to avoid the exorbitant expense of acquiring and installing replacements.” (17)

When Pillowtex went bankrupt, Duke filed a motion seeking to compel the payment of post-petition lease payments under section 365(d)(10) of the Bankruptcy Code. (18) The U.S. Court of Appeals for the Third Circuit held that the purported lease agreement was in fact a secured financing. (19) Noting that the issue is a question of state law, the court emphasized that the answer depends upon the “economic realities of the underlying transaction.” (20) The intent of the parties to create a true lease was not controlling, although it meant that the lessee (Pillowtex) had the burden of proof to recharacterize the agreement as something other than a lease. (21) The court first found that the transaction was not a security interest under any of U.C.C. section 1-201(37)’s per se tests. (22) It then invoked criteria from the old case of In re Edison Bros. Stores, Inc. (23) in order to determine the economic reality of the agreement. (24) Overlooking the recent amendments to U.C.C. section 1-201(37), the court erroneously cited the “full payout” character of the transaction as a circumstance weighing against true lease status. (25) Yet the court’s conclusion that the agreement was a security interest also rested on the unfavorable end-of-term options and the lack of any meaningful residual value to Duke in the equipment. (26) The Third Circuit held that “the combination of the cost of retrieving the fixtures and their poor market value renders the residual interest negligible.” (27)

Two other recent cases upheld the “true lease” character of challenged transactions, with the courts in both cases noting that the burden is on the challenging party to prove that a lease transaction is not what it purports to be. In re QDS Components, Inc. (28) involved equipment leases with a sixty-month lease term, a fixed-price purchase option set at over six times the amount of the monthly rent, typical “net lease” provisions requiring the lessee to pay all taxes, fees and maintenance costs, and an early termination clause allowing the lessee to terminate the lease if it paid the remaining lease rentals (discounted to present value) through the end of the lease term plus the option purchase price. There was a stipulation that the economic life of the equipment exceeded the lease term. After the lessee flied for bankruptcy, it sold its assets to a purchaser who asserted that the leases were disguised secured financings and that it owned title to the equipment subject to the lessor’s security interests.

The opinion of the court extensively reviewed the criteria for distinguishing between leases and disguised security interests. None of the per se factors in U.C.C. section 1-201(37) applied to destroy true lease status in this case, the court found. (29) The lease did not exhaust the economically useful life of the equipment nor was a nominal option purchase price involved. (30) The leases did not give the lessee an equity interest in the equipment, nor was true lease status destroyed by “net lease” provisions, the large up-front rental payments made under the leases, or the fact that the lessor filed a precautionary U.C.C.-1 financing statement. The court found that because the lessor had retained an economically meaningful reversionary interest in the equipment, the agreement was a true lease. (31)

In In re Rebel Rents, Inc. (32) a lessee of trucks and construction equipment filed for Chapter 11 bankruptcy protection and stopped making rental payments. In response to the lessor’s motion for relief from the automatic stay, the lessee claimed that the “hell or high water” clause leases were secured financing, and not true leases, because they contained “net” lease provisions obligating the lessee to pay all taxes and maintenance fees and to assume the risk of loss or damage to the vehicles. The court rejected these arguments. (33) True leases were present, the court held, because the lessee failed to show that the lease agreements contained a nominal purchase option or exhausted the vehicles’ estimated residual value. (34) The mere fact that the lessee “bears the risk of loss and pays taxes, maintenance and insurance on the vehicles does not, of and by itself, transform the leases in [security agreements].” (35)


Consumer lessees’ warranty rights under the U.C.C. and the Magnuson-Moss Warranty Act (36) were discussed in Voelker v. Porsche Cars North America, Inc. (37) The suit was brought by the lessee of a Porsche automobile, claiming breach of express and implied warranties by the manufacturer and by the car dealership-lessor. The lessee claimed that the car’s side airbags were defective because they failed to deploy in an accident, and that defendants breached a promise to repair when the leased car could not be repaired promptly due to a shortage of repair parts.

The court held that lack of privity of contract between the consumer lessee and the manufacturer defeated the lessee’s claims against the manufacturer for economic damages for breach of implied warranty. (38) Moreover, a conspicuous bold type warranty disclaimer on the face of the lease, explicitly mentioning merchantability, shielded the Porsche dealer-lessor from suit for breach of the implied warranty of merchantability. (39) Because the lessee had received an assignment of all the Porsche dealer-lessor’s rights under the manufacturer’s warranty, the court remanded the case to allow the consumer lessee to press its claims for breach of express warranty against the manufacturer under the Magnuson-Moss Act. (40) The court held, however, that there was no basis for an express warranty claim under the U.C.C. or Illinois’s lemon law. (41) Though the lessee claimed that the manufacturer breached an express warranty that the car’s side airbag would work, the court said that there was nothing to show that “a warranty against defective design was part of” the lease contract. (42) Moreover, “the promise to repair is not an express warranty” under the U.C.C. (43)

These outcomes dismissing a consumer-lessee’s U.C.C. warranty claims against the manufacturer seem harsh. They rest in significant part on outdated notions of privity. The court’s rulings might well be different under the proposed amendments to U.C.C. Article 2. (44)


Two recent court decisions addressed the enforceability of “hell or high water” clauses. (45) In Harte-Hanks Direct Marketing/Baltimore, Inc. v. Varilease Technology Finance Group, Inc., (46) the court upheld the enforceability of a “hell or high water” clause in an equipment finance lease. (47) The court rejected the lessee’s claim for unjust enrichment against the lessor’s assignee. (48) The assignee did not assume any duty to provide maintenance services, and the lessee agreed that its obligation to pay rent was absolute and unconditional. Hence, the assignee’s retention of the rent payments without providing “maintenance services in return did not violate fundamental principles of justice, equity and good conscience.” (49)

In Information Leasing Corp. v GDR Investments, Inc. (50) the court upheld the enforceability of a “hell or high water” clause in an equipment finance lease, but remanded the case for a new trial in order to develop more detailed findings of fact and conclusions of law. (51) The lessee leased an Automated Teller Machine (“ATM”) for use on the premises of his Exxon station. Shortly thereafter, the servicer of the ATM went bankrupt. The lessee tried unsuccessfully to contact the lessor to take back the ATM. The trial court ruled that the lessee owed the lessor nothing. The appellate court reversed, relying on the “hell or high water” clause contained in the lease and on U.C.C. section 2A-407. (52) The court rejected the lessee’s arguments that the ATM lease was a consumer lease, the goods had not been accepted and the contract was unconscionable. (53) Finding the record unclear, the case was remanded for further proceedings on whether the lessor consented to termination of the lease through words or conduct, and whether the lessor tried to mitigate damages by re-leasing the ATM. (54)


Courts continue to review liquidated damage provisions in equipment leases to determine whether they reflect an amount or formula that is “reasonable in light of the then anticipated harm caused by the default.” (55) Applying this standard, the U.S. Court of Appeals for the Third Circuit in In re Montgomery Ward Holding Corp (56) invalidated a lease liquidated damage formula on the ground that it placed the non-breaching lessor in a better position than if the lease was fully performed. (57) The lessor argued that its liquidated damages formula (58) was appropriate to enable it to receive a return that was typical for other, similar lease transactions. The court found, however, that this particular lease was structured with a low initial rental rate. (59) The lessor took the risk that the lessee would exercise its option to extend the lease term at a significantly higher rental rate. (60) But the lessee was not obligated to extend the lease or purchase the equipment. The court was unwilling to permit the lessor to realize the economic benefits, after default, that it would have received only if the purchase option had been exercised. (61)

Another court struck down a liquidated damage clause that credited the lessee with only that portion of the sales proceeds from the resale of the leased equipment that exceeded a stipulated casualty value. (62) In the court’s view, this would have resulted in a windfall for the lessor. (63) That provision, as well as the lessor’s admission that the casualty value amount was set to be “‘substantially’ above the fair market of the equipment” rendered the lease liquidated damage provision an unenforceable penalty. (64)


Article 2A contains rules about choice-of-law and forum selection clauses only for cases involving consumer leases. (65) The provisions of Article 1 and the common law govern these issues in commercial equipment leasing cases. (66)

In Andin International, Inc. v. Matrix Funding Corp., (67) a New York court assessed the validity of a Utah choice-of-law clause in a commercial equipment lease under the “reasonable relation” test of U.C.C. section 1-105. The case involved a Utah computer lessor and a New York commercial lessee that was challenging the validity of an automatic lease renewal clause. The court said that a New York consumer protection law supported the lessee’s suit against this type of lease provision. (68) Though New York courts generally enforce contractual provisions for choice of law, the court noted that the law chosen must not violate a fundamental public policy of New York. (69) The court scheduled a hearing on the lessee’s claim that the automatic lease renewal clause was unconscionable, finding this result appropriate under either New York or Utah law. (70)

Relying on section 2A-104(2) and similar provisions in U.C.C. section 9-201(c)(1), the court in B&S Marketing Enterprises, LLC v. Consumer Protection Division (71) held that, in case of a conflict between a consumer protection statute and the U.C.C., the consumer protection statute controls. (72) As a result, the court held that a purported sale-leaseback was in fact a “usurious loan,” violating Maryland consumer protection laws. (73)

The court in Information Leasing Corp v. King (74) upheld the validity of a forum selection clause in a commercial equipment lease. There was no fraud or overreaching, the clause was conspicuous, and the court found that enforcement of the Ohio forum selection clause was not so “manifestly and gravely inconvenient” to the objecting North Carolina lessee that it would be “effectively deprived of a meaningful day in court.” (75) This is consistent with the comments to section 2A-106, which note that choice of forum clauses in commercial leases are “prima facie valid.” (76)

(1.) See United States Department of Commerce, Bureau of Economic Analysis, International Trade Administration and Equipment Leasing Association of America, Trends and Forecasts for Equipment Leasing in the United States (2003).

(2.) U.C.C. [subsections] 2A-101 to -532 (2003).

(3.) Clarifying comments have been inserted into section 2A-101’s Prefatory Note (leasing is distinctive), as well as the comments to sections 2A-201 (statute of frauds), 2A-106 (choice of law/forum in consumer leases), 2A-211 (warranties against interference), 2A-222 (E-commerce and leasing), 2A-310 (accessions), 2A-405 (excused performance), and 2A-517(f) (new statutory right for lessee to use goods as “mitigation of damages”). For a discussion of the importance of the clarifying comments, see Edwin E. Huddleson, Leasing Is Distinctive!, 35 U.C.C. L.J. 15, 22-31 (2003) [hereinafter Huddleson]

(4.) The Commissioners on Uniform State Laws have announced that they are no longer actively proposing UCITA for state legislative enactment. The choice of law rules in proposed new U.C.C. [section] 1-301 (2003) also may be abandoned.

(5.) Original Article 2 was not widely enacted until after it was significantly revised by the Editorial Board of the U.C.C., in response to thoughtful criticisms rendered by the New York Law Revision Commission in its study of the 1952 Official Draft. See, e.g., Donald J. Rapson, Deficiencies and Ambiguities in Lessors’ Remedies Under Article 2A: Using Official Comments to Cure Problems in the Statute, 39 ALA. L. REV. 875, 878 (1988). Original Article 2A was not widely enacted until after it was significantly revised by the Article 2A Drafting Committee, the ALI, and the Permanent Editorial Board, in response to criticisms articulated by the California State Bar and others. See id. at 880-81.

(6.) 266 F. Supp. 2d 432 (M.D.N.C. 2003).

(7.) Id. at 437.

(8.) Id.

(9.) Id. at 438.

(10.) 295 F. Supp. 2d 1063 (D. Minn. 2003).

(11.) Id. at 1071-72.

(12.) Id. at 1069.

(13.) Id. at 1076.

(14.) Tax cases and authorities defining a lease determine whether the owner/lessor will obtain the tax benefits of ownership. Accounting principles allow off-balance sheet treatment of the obligations of a lessee in a true operating lease. See Huddleson, supra note 3 (canvassing distinctive legal rules for equipment leasing).

(15.) There is no federal statutory definition of a lease, and federal bankruptcy law, for example, looks to state commercial law to define the difference between a true lease and a security interest. See, e.g., In re Pillowtex, 349 F.3d 711, 716, 52 U.C.C. Rep. Serv. 2d (West) 18, 25 (3d Cir. 2003). U.C.C. standards are influential in tax issues, and are determinative of lease remedies issues, as well as whether a transaction is a “true lease” outside the ambit of state usury laws. For a discussion of the different treatment of true leases and leases intended as security, see Huddleson, supra note 3, at 17 n.8.

(16.) Pillowtex, 349 F.3d 711, 52 U.C.C. Rep. Serv. 2d (West) 18.

(17.) Id. at 720, 52 U.C.C. Rep. Serv. 2d (West) at 30 (alteration in original) (citation omitted).

(18.) 11 U.S.C. [section] 365(d)(10) (2000).

(19) Pillowtex, 349 F.3d at 723, 52 U.C.C. Rep. Serv. 2d (West) at 35.

(20.) Id. at 713, 716, 52 U.C.C. Rep. Serv. 2d (West) at 20, 25.

(21.) Id. at 716-17 n.6, 721, 52 U.C.C Rep. Serv. 2d (West) at 26 n.6, 32.

(22.) See U.C.C. [section] 1-201(37) (2000) (providing four instances when a lease is intended as security per se). These statutory provisions distinguishing a lease from a security interest are carried forward, without substantive change, into revised U.C.C. section 1-203 (2003).

(23.) 207 B.R. 801, 34 U.C.C. Rep. Serv. 2d (West) 594 (Bankr. D. Del. 1997).

(24.) Pillowtex, 349 F.3d at 719, 52 U.C.C. Rep. Serv. 2d (West) at 29 (citing In re Edison Bros. Stores, Inc., 207 B.R. 801,809-10, 34 U.C.C. Rep. Serv. 2d (West) 594, 605 (Bankr. D. Del. 1997)).

(25.) Id., 52 U.C.C. Rep. Serv. 2d (West) at 29. U.C.C. section 1-201(37), as amended, makes it clear that so-called “full payout” provisions do not destroy the true lease status of a transaction. U.C.C. [section] 1-201(37)(b) (2000). These statutory provisions are carried forward, without substantive change, into new proposed U.C.C. [section] 1-203(c) (2003).

(26.) Pillowtex, 349 F.3d at 723, 52 U.C.C. Rep. Serv. 2d (West) at 34.

(27.) Id., 52 U.C.C. Rep. Serv. 2d (West) at 34.

(28.) 292 B.R. 313, 50 U.C.C. Rep. Serv. 2d (West) 973 (Bankr. S.D. Ohio 2002).

(29.) Id. at 340, 50 U.C.C. Rep. Serv. 2d (West) at 1013.

(30.) The court explained that, in determining whether an option price is nominal, the residual value estimated by the parties at the time of the lease agreement is controlling, not the actual value at the time of later court proceedings. Id. at 337, 50 U.C.C. Rep. Serv. 2d (West) at 1008.

(31.) Id. at 343, 345, 50 U.C.C. Rep. Serv. 2d (West) at 1016, 1019.

(32.) 291 B.R. 520, 50 U.C.C. Rep. Serv. 2d (West) 352 (Bankr. C.D. Cal. 2003).

(33.) Id. at 535, 50 U.C.C. Rep. Serv. 2d (West) at 362.

(34.) Id. at 528-29, 50 U.C.C. Rep. Serv. 2d (West) at 360-61.

(35.) Id. at 529, 50 U.C.C. Rep. Serv. 2d (West) at 361. The court notes, if the lease was assumed, unpaid rent for first sixty days must be cured

(36.) The Magnuson-Moss Act defines three categories of consumer. 15 U.S.C. [section] 2301(3) (2000).

(37.) Voelker, 353 F.3d 516, 52 U.C.C. Rep. Serv. 2d (West) 450 (7th Cir. 2003) superseding 348 F.3d 639, 51 U.C.C. Rep. Serv. 2d (West) 960 (7th Cir. 2003).

(38.) Voelker, 353 F.3d at 526, 52 U.C.C. Rep. Serv. 2d (West) at 458.

(39.) Id., 52 U.C.C. Rep. Serv. 2d (West) at 457.

(40.) Id. at 528, 52 U.C.C. Rep. Serv. 2d (West) at 459.

(41.) Id. at 526, 52 U.C.C. Rep. Serv. 2d (West) at 458.

(42.) Id. at 527, 52 U.C.C. Rep. Serv. 2d (West) at 459 (citing Hasek v. DaimlerChrysler Corp., 745 N.E.2d 627,635, 44 U.C.C. Rep. Serv. 2d (West) 108, 116-17 (Ill. Ct. App. 2001) (“reasoning that, although the plaintiff had shown the existence of a design defect, judgment for the defendant was appropriate because the express warranty did not by its contractual terms, cover design defects”)).

(43.) Id. at 526, 52 U.C.C. Rep. Serv. 2d (West) at 458 (citing Cosman v. Ford Motor Co., 674 N.E.2d 61, 67, 33 U.C.C. Rep. Serv. 2d (West) 1118, 1124 (Ill. Ct. App. 1996) (reasoning that “the breach of the promise to repair which plaintiffs allege … is not a ‘warranty’ as defined by the [Uniform Commercial] Code”)).

(44.) See revised U.C.C. [section] 2-313A (2003) (extending seller’s obligations created by record accompanying the goods to remote purchasers, including lessees) and U.C.C. [section] 2-318 (2003) (permitting third party beneficiaries to enforce warranties and obligations, including section 2-313A obligations to remote purchasers and sellers’ remedial promises).

(45.) A so-called “hell or high water” clause provides generally that the lessee’s obligations under the lease are irrevocable and independent upon the lessee’s acceptance of the goods and not subject to cancellation or termination. See U.C.C. [section] 2A-407 (2003).

(46.) 299 F. Supp. 2d 505 (D. Md. 2004) . (47.) Id. at 522.

(48.) Id. at 521.

(49.) Id.

(50.) 787 N.E.2d 652, 51 U.C.C. Rep. Serv. 2d (West) 174 (Ohio Ct. App. 2003).

(51.) Id. at 657, 51 U.C.C. Rep. Serv. 2d (West) at 181-82.

(52.) Id., 51 U.C.C. Rep. Serv. 2d (West) at 181-82.

(53.) Id. at 655-56, 51 U.C.C. Rep. Serv. Serv. 2d (West) at 179-81.

(54.) Id. at 657, 51 U.C.C. Rep. Serv. 2d (West) at 182.

(55.) U.C.C. [section] 2A-504 (2003) (requiring liquidated damages to be reasonable in light of anticipated harm).

(56.) 326 F.3d 383, 50 U.C.C. Rep. Serv. 2d (West) 202 (3d Cir. 2003).

(57.) Id. at 389, 50 U.C.C. Rep. Serv. 2d (West) at 208-09.

(58.) The stipulated “casualty value” damages sought by the lessor, as provided in the lease, were the sum of “(1) ‘the present value of the unpaid rent through the term of the lease,’ (2) ‘the present value of “the residual value of the equipment necessary for [the lessor] to recover its [initial] investment [in the equipment],’ and (3) an amount allowing [the lessor] to realize a profit on the transaction.” Id. at 386, 50 U.C.C. Rep. Serv. 2d (West) at 205. The formula used by the lessor did not credit the lessee with any proceeds from the sale or re-lease of the equipment.

(59.) Id. at 388, 50 U.C.C. Rep. Serv. 2d (West) at 207.

(60.) Id. at 388, 390, 50 U.C.C. Rep. Serv. 2d (West) at 207, 211.

(61.) The court concluded that the lessor was entitled to damages equal to the sum of (i) the present value of any unpaid rent, (ii) “the present value at the time of the breach of the monthly rentals” through the end of the originally agreed-upon term of the leases, and (iii) the then-present value of the expected residual value of the leased equipment, at the end of the originally agreed-upon lease term, as anticipated by the lessor at the time the lease was entered into. Id. at 391, 50 U.C.C. Rep. Serv. 2d (West) at 212.

(62.) E Plus Group, Inc. v. Panoramic Communications LLC, 02 CIV. 7992 (DLC), 2003 U.S. Dist. LEXIS 4-657, at *22-*23, 50 U.C.C. Rep. Serv. 2d (West) 213, 222 (S.D.N.Y. 2003).

(63.) Id. at *26, 50 U.C.C. Rep. Serv. 2d (West) at 224.

(64.) Id. at *23, 50 U.C.C. Rep. Serv. 2d (West) at 223.

(65.) U.C.C. [section] 2A-106 (2003) (limiting the parties’ ability to choose applicable law and forum in a consumer lease). See also U.C.C. [section] 1-301(g)(2) (2003) (accord).

(66.) See infra notes 67-76 and accompanying text for the common law.

(67.) 756 N.Y.S.2d 724- (N.Y. App. Div. 2003).

(68.) Id. at 727.

(69.) Id. at 726-27.

(70.) Id. The outcome would be the same under the choice-of-law rules in revised section 1-301. Though the old “reasonable relation” test is retained only for consumer transactions, the proposed new rules make it clear that a contractually-chosen law will be subject to the “fundamental policy” of the state whose law would otherwise govern in the absence of a contractually agreed-upon choice-of-law. See U.C.C. [section] 1-301 cmt. 6. (2003). Revised comment 9 notes that a forum may decline to apply the law of a jurisdiction selected by the parties when application of that law would be contrary to a fundamental policy of the forum, Id. at cmt. 9.

(71.) 835 A.2d 215, 52 U.C.C. Rep. Serv. 2d (West) 687 (Md. Ct. Spec. App. 2003).

(72.) Id. at 228-29, 52 U.C.C. Rep. Serv. 2d (West) at 700.

(73.) Id. at 236.

(74.) 800 N.E.2d 73, 52 U.C.C. Rep. Serv. 2d (West) 443 (Ohio Ct. App. 2003).

(75.) Id. at 78.

(76.) See U.C.C. [section] 2A-106 cmt. (2003) (citing Bremen v Zapata Off-Shore Co., 407 U.S. 1, l0 (1972))

Edwin E. Huddleson III, Barry A. Graynor, Lawrence F. Flick II, and Stephen T. Whelan *

* Edwin E. Huddleson III, a member of the California, District of Columbia, and Maryland bars, practices law in Washington, D.C. Barry A. Graynor, a member of the California bar, practices law with Cooley Godward LLP in San Francisco. Lawrence F. Flick II, a member of the Pennsylvania and New Jersey bars, practices law with Blank Rome LLP in Philadelphia. Stephen T. Whelan, a member of the New York bar, practices law with Thacher Proffitt & Wood LLP in New York City. Mr. Huddleson is Chair