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Date: March 15, 2000
To: Uniform Consumer Leases Act Drafting Committee and Observers
From: Ralph J. Rohner, Reporter
Re: Draft for April 7-9 meeting in Boston
Enclosed is the new draft for our meeting next month. There are lots of matters of language and policy still to be pinned down, but I am reasonably optimistic we can be prepared for our second reading this summer. We are definitely scheduled for that second reading, and there are no current plans for an additional Drafting Committee meeting between April and July.
In this draft I have tried to flag every matter of any substance whatever with "4/00 Updates." I have done some tinkering with the "Reporter's Notes," but they are probably not altogether complete or in perfect harmony with the current statutory text.
As to the draft:
1. Style: Our September 1999 draft was thoroughly reviewed by the Style Committee in February, and that editing is incorporated in this draft. I am very grateful to the Style Committee, and especially Commissioner Jerry Bassett, for identifying lots of opportunities to correct glitches and otherwise improve the quality of the draft. Several style matters deserve note:
* Style recommends that we use the term "consumer lease" (instead of just "lease") throughout the Act. This does not become as tedious as it might seem, and in fact makes for more logical and simpler definitions of "lease" and "consumer lease" in Section 102.
* Style also advises that the sub-parts of the Act should be identified as "Articles" rather than "Parts."
* Style recommends that we split the very long Section 501 (Private Remedies) into smaller sections. The content of former 501 is now contained in Sections 501 through 504.
2. "Big Issues": Here is my sense of the major unresolved issues:
a. Lease rate. Although there was a thin "sense of the House" recommendation last July that we abandon a lease rate disclosure, the Committee has not yet done so. Meanwhile, Connecticut has enacted a mandatory lease rate disclosure (based on an earlier draft of the UCLA). A group of industry, consumer and academic folks are working on implementation of the Connecticut law. I hope by our April meeting we will have a reliable read on how that exercise is going, and whether it is likely to provide us with specific drafting suggestions for the lease rate provisions in the draft. (Meanwhile, the draft of Section 207 on lease rate calculation is unchanged.)
b. Early Termination & Excess Wear & Tear. Assuming the draft accurately captures the Committee's decisions in September, I think we are close to closure on the contents of Sections 405 and 406. We shall see.
c. Private Remedies. We had identified a number of provisions violations of which would support statutory damages. But there remain questions: Is that list of sections complete? What amounts of statutory damages? Fixed or variable amounts? Have we adequately dealt with class actions, statute of limitations, assignee liability, and similar issues.
d. Warranties. We have carried an entry for a Section 308 on warranties of quality, but have never given it any text, waiting for the outcomes of the UCC 2 and 2A revisions. Now that they are nearing completion, what is our posture on warranties in consumer leases?
e. Other matters. Here, in order of the sections, are other issues to be thinking about:
102 Definitions of "lease" and "consumer lease"
New definitions of "expiration," "termination," "state."
106(b) "Competence" vs. "sophistication"
107(a) Too restrictive a choice of law rule, or not?
109 Unconscionability -- which version?
201 Add definition of "advertisement"?
202 Add mail option for response to electronic request for lease form?
204(b) What if insurance is packaged at no extra cost?
304(b) & (c) Proper caps for late charges?
306 Add (c) re disclosure about subleasing?
307 Insert definition of "open end lease"?
401 Does (a) adequately state the "reduced insurance proceeds" idea?
In (c)(2), what's best language for the "moral hazard" exception?
402 Are (b) and (c) clear on right to cure, and mechanics of it?
403 What about electronic disabling of computers (or cars!)?
In (b), is it OK to apply realized value "as provided in the lease"?
404(e) What's to be the sanction for improper disposition?
405 Is "constant yield" definition OK?
Do (c) and (d) accurately state the cap/safe-harbor rules the Committee voted?
406 In (e)(4), what protection for lessee who misses pre-surrender inspection?
507 Do we leave "Administration of Act" optional for the states?