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You buy a $100,000 equipment lease. The customer signed electronically. The seller sends you the contract and an assignment. You save both in your files and fund the purchase. Have you received everything you need to protect your interest if someone else claims the same lease payments? A PDF and an assignment may not answer that question.
Recent changes to the Uniform Commercial Code, or UCC, address that problem. They also deal with leases that include equipment, software, and services in one package. Both issues matter in everyday equipment financing.
The changes come from amendments developed and approved by the Uniform Law Commission and the American Law Institute in 2022, which states may choose to adopt. Colorado has adopted them. Ohio’s amendments took effect October 6, 2026. Ohio provides the examples here, but the applicable state’s law and effective dates must be checked for each transaction.
Make Sure You Receive Control of the Electronic Contract
A customer’s electronic signature shows agreement to the contract. It does not, by itself, establish that a buyer controls the electronic record. The law distinguishes an “authoritative copy” from ordinary copies. Think of the authoritative copy as the official version that matters for these rules. A PDF in your inbox may simply be a copy for reference.
Ohio’s amended rules provide more than one way to establish control. They address how the system identifies the official electronic copy and its assignee, who can change the identified assignee, and who can transfer control. The requirements depend on the method used. Before paying for the lease, ask the seller and the company handling the electronic documents: Which is the official copy? How does the system show that our company now controls it? What confirms that the transfer was completed?
An assignment and the electronic system should tell the same story. Getting the documents is part of the closing. Confirming the required control is another part.
Find Out Whether There Is Also an Official Paper Copy
Suppose the seller transfers control of an electronic lease but keeps a signed paper version. Does that paper version matter? It might. Under the amended rules, a buyer relying on possession and control must account for every authoritative paper and electronic copy. Ordinary printouts and backup copies are different.
Ask whether an official paper copy also exists. If it does, determine how it will be delivered or properly held for you. Do not assume that receiving the electronic contract takes care of the paper version.
You can still protect a security interest in lease receivables by filing a UCC financing statement, subject to the usual requirements. But filing and being first in line are different matters. The special rules allowing a lease buyer to take priority over certain competing interests require possession or control of the relevant official copies and satisfaction of other conditions. Filing alone does not provide that special priority.
Know What the Monthly Payment Covers
A copier contract may include the machine, maintenance, and software for one monthly payment. If the maintenance company stops servicing the copier, can the finance company still collect the whole payment?
The amended rules make it especially important to understand that package. The UCC calls these arrangements “hybrid leases,” meaning leases combined with other property or services. Which lease rules apply depends in part on whether leasing the equipment is the main part of the transaction.
The classification also matters when someone buys the payments. The revised definition of “chattel paper,” the legal category covering many equipment lease receivables, focuses on the right to receive payment. For leases, it asks whether the transaction’s main purpose was to give the customer possession and use of equipment. A document’s title does not settle that question.
Equipment lenders often rely on the rule that, after acceptance, a customer under a qualifying commercial finance lease must keep paying despite problems with the equipment. Where the equipment portion of a hybrid lease does not predominate, Ohio’s amended law applies that statutory protection to promises made in exchange for possession and use of the equipment. It should not be assumed to cover every service charge in the package.
The practical response is to identify what the customer is paying for, who provides each service, and what the contract says if a service fails. Contractual payment protections also need their own review. Putting everything into one monthly bill does not make every obligation legally identical.
Check Which State Rules Apply
A lease may say that one state’s law governs the contract. That is a starting point, but it may not answer every question about competing creditors.
The amended rules for electronic lease records can look to the official electronic copy, related records, and the rules of the system holding the documents to determine which state’s law governs protection and priority. The law of the debtor’s location still governs protection through filing a financing statement.
Have counsel check the contract and the electronic document system together. The rule governing a customer’s duty to pay and the rule deciding which creditor comes first may require different analyses.
Review Existing Transactions Before the Deadline
Ohio has an October 6, 2027 adjustment date for certain existing interests. If an existing protected interest already meets the new requirements, further action may not be necessary. If it does not, the transition rules may give time to comply. That protection can end before the adjustment date if it would otherwise have expired under the old law. This is a reason to review the affected files now. It is not permission to ignore an earlier filing or continuation deadline. Other states have their own dates and transition provisions.
For your next lease purchase, establish what payments you are buying, identify the official contract copies, and confirm the required transfer of possession and control. For a package that includes services, understand those obligations before deciding how dependable the payment stream is. These are manageable closing questions. They become much harder after another creditor or an unhappy customer enters the picture.
The Law Offices of Kenneth Charles Greene present this article. All copyrightable text, the selection, arrangement, and presentation of all materials (including information in the public domain), and the overall design of this presentation are the property of the Law Offices of Kenneth Charles Greene. All rights reserved. Permission is granted to download and reprint materials from this article for the purpose of viewing, reading, and retaining for reference. Any other copying, distribution, retransmission, or modification of information or materials from this article, whether in electronic or hard copy form, without the express prior written permission of Kenneth C. Greene is prohibited. The materials available from this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any issue or problem. Use of and access to these materials does not create an attorney-client relationship between the Law Office of Kenneth Charles Greene and the user or viewer. The opinions expressed herein are the opinions of the individual author.
The Law Offices of Kenneth Charles Greene present this article. All copyrightable text, the selection, arrangement, and presentation of all materials (including information in the public domain), and the overall design of this presentation are the property of the Law Offices of Kenneth Charles Greene. All rights reserved. Permission is granted to download and reprint materials from this article for the purpose of viewing, reading, and retaining for reference. Any other copying, distribution, retransmission, or modification of information or materials from this article, whether in electronic or hard copy form, without the express prior written permission of Kenneth C. Greene is prohibited. The materials available from this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any issue or problem. Use of and access to these materials does not create an attorney-client relationship between the Law Office of Kenneth Charles Greene and the user or viewer. The opinions expressed herein are the opinions of the individual author.
Sources
- Ohio amendments effective October 6, 2026, as reflected in the amended and new sections cited below; Colorado SB23-090 enacted summary: https://leg.colorado.gov/bills/sb23-090
- Ohio Rev. Code § 1309.102(A)(11) (UCC 9-102): https://codes.ohio.gov/ohio-revised-code/section-1309.102
- Ohio Rev. Code § 1309.105 (UCC 9-105): https://codes.ohio.gov/ohio-revised-code/section-1309.105/10-6-2026
- Ohio Rev. Code §§ 1309.345, 1309.330 and 1309.312 (UCC 9-314A, 9-330 and 9-312): https://codes.ohio.gov/ohio-revised-code/section-1309.345 ; https://codes.ohio.gov/ohio-revised-code/section-1309.330 ; https://codes.ohio.gov/ohio-revised-code/section-1309.312
- Ohio Rev. Code §§ 1310.02 and 1310.46 (UCC 2A-102 and 2A-407): https://codes.ohio.gov/ohio-revised-code/section-1310.02 ; https://codes.ohio.gov/ohio-revised-code/section-1310.46
- Ohio Rev. Code § 1309.343 (UCC 9-306A): https://codes.ohio.gov/ohio-revised-code/section-1309.343
- Ohio Rev. Code §§ 1316.102 and 1316.302 (UCC A-102 and A-302): https://codes.ohio.gov/ohio-revised-code/section-1316.102 ; https://codes.ohio.gov/ohio-revised-code/section-1316.302
