NMSA 55-2A-106. Limitation on power of parties to consumer lease to
AI-assisted research summary: Consumer lease parties cannot make certain choice-of-law or forum clauses enforceable when they point away from the lessee’s residence or the goods’ use location.
55-2A-106. Limitation on power of parties to consumer lease to choose applicable law and forum. (1) If the law chosen by the parties to a consumer lease is that of a jurisdiction other than a jurisdiction in which the lessee resides at the time the lease agreement becomes enforceable or within thirty days thereafter or in which the goods are to be used, the choice is not enforceable. (2) If the judicial forum chosen by the parties to a consumer lease is a forum that would not otherwise have jurisdiction over the lessee, the choice is not enforceable. (3) If the forum for an arbitration or mediation hearing chosen by the parties to a consumer lease is in a state or in a similar political subdivision in a foreign country other than the state or the similar subdivision in the foreign country in which the lessee resides at the time the lease agreement becomes enforceable or within thirty days thereafter or in which the goods are to be used, the choice is not enforceable. History: 1978 Comp., § 55-2A-106, enacted by Laws 1992, ch. 114, § 13; 2007, ch. 252, § 1. OFFICIAL COMMENTS UCC Official Comments © by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved. Uniform statutory source. — Unif. Consumer Credit Code § 1.201(8), 7A U.L.A. 36 (1974). Changes. — Substantially revised. Purposes. — There is a real danger that a lessor may induce a consumer lessee to agree that the applicable law will be a jurisdiction that has little effective consumer protection, or to agree that the applicable forum will be a forum that is inconvenient for the lessee in the event of litigation. As a result, this section invalidates these choice of law or forum clauses, except where the law chosen is that of the state of the consumer's residence or where the goods will be kept, or the forum chosen is one that otherwise would have jurisdiction over the lessee. Subsection (1) limits potentially abusive choice of law clauses in consumer leases. The 30-day rule in subsection (1) was suggested by Section 9-103(1)(c) [55-9-103 NMSA 1978]. This section has no effect on choice of law clauses in leases that are not consumer leases. Such clauses would be governed by other law. Subsection (2) prevents enforcement of potentially abusive jurisdictional consent clauses in consumer leases. By using the term judicial forum, this section does not limit selection of a nonjudicial forum, such as arbitration. This section has no effect on choice of forum clauses in leases that are not consumer leases; such clauses are, as a matter of current law, "prima facie valid". The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972). Such clauses would be governed by other law, including the Model Choice of Forum Act (1968). Cross references. — Section 9-103(1)(c). "Consumer lease". Section 2A-103(1)(e) [55-2A-103 NMSA 1978]. "Lease agreement". Section 2A-103(1)(k) [55-2A-103 NMSA 1978]. "Lessee". Section 2A-103(1)(n) [55-2A-103 NMSA 1978]. "Goods". Section 2A-103(1)(h) [55-2A-103 NMSA 1978]. "Party". Section 1-201(29) [55-1-201 NMSA 1978].