New Jersey § 12a:2a-305

§ 12a:2a-305.

(1) Subject to the provisions of 12A:2A-303, a buyer or sublessee from the lessee

of goods under an existing lease contract obtains, to the extent of the interest transferred,

the leasehold interest in the goods that the lessee had or had power to transfer,

and except as provided in subsection (2) and 12A:2A-511(4), takes subject to the existing

lease contract. A lessee with a voidable leasehold interest has power to transfer a good leasehold

interest to a good faith buyer for value or a good faith sublessee for value, but

only to the extent set forth in the preceding sentence. When goods have been delivered under a transaction of lease the lessee has that

power even though: (a) the lessor was deceived as to the identity of the lessee; (b) the delivery was in exchange for a check which is later dishonored; or (c) the delivery was procured through theft under the criminal law. (2) A buyer in the ordinary course of business or a sublessee in the ordinary course

of business from a lessee who is a merchant dealing in goods of that kind to whom

the goods were entrusted by the lessor obtains, to the extent of the interest transferred,

all of the lessor's and lessee's rights to the goods, and takes free of the existing

lease contract. (3) A buyer or sublessee from the lessee of goods that are subject to an existing

lease contract and are covered by a certificate of title issued under a statute of

this State or of another jurisdiction takes no greater rights than those provided

both by this section and by the certificate of title statute.