Question

Roller Riders and Equipment (RR&E) leased bicycle equipment from Bob’s Leasing. The lease said nothing about assignment. Bob’s Leasing then assigned the lease to TBA as security for a loan. Bob’s Leasing defaulted on its loan, and RR&E failed to make several payments on the lease. TBA sued RR&E for the lease payments. Was the assignment valid, given the fact that the original lease made no mention of it? (Explain why or why not) If the assignment was valid, may RR&E raise defenses against TBA that it could have raised against Bob’s Leasing? (Explain your answer).

Answer 1

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Answer:

1. The assignment is valid
2. No, RR&E cannot raise defences against TBA which it could've raised against Bob's Leasing.

Explanation:

1. Where a lease is silent on whether a tenant can convey its rights under a lease,such that there is no covenant restraining him to do so, then the tenant is free to convey.
2. An assignment does not relieve an original tenant of its liabilities unless the one assigned expressly agrees to bear the original tenant's liabilities. This is due to the fact that the tenant is not privy to the lease contract between the landlord and the original tenant.