CLFP Exam- Leasing Law &
Documentation Q&A 100% Solved
Describe Security Deposit Clauses - ✔✔Should Include:
-The amount of the security deposit
-Where it will be held
-The interest rate paid on the security deposit if applicable
Reasons that the lessor can keep the security deposit
-How the security deposit will be returned
Acceleration Clause - ✔✔a term that fully matures the performance due
from a party upon a breach of the contract
Disclaimer of warranties clause - ✔✔exculpatory clauses extinguish or limit
liability of a potentially culpable party through the use of disclaimer,
assumption of risk and indemnification clauses as well as releases of
liability. Must be Conspicuous.
Waiver of Defense Clause - ✔✔where the lessee 'agrees not to assert
against an assignee' of the lease payments, any defenses, setoffs, or
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©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
, claims it may have against the lessor, as the original payee under the
lease.
Hell or High Water Clause - ✔✔where the lessee agrees that its payment
obligations under the lease are 'absolute and unconditional' and are not
subject to any defense, setoff, or counterclaim that the lessee may have
against the lessor, its assignee, the manufacture or seller of the equipment,
or against any person for any reason whatsoever-essentially, it agrees to
pay 'come hell or high water'
'After acquired' clauses - ✔✔a clause that may appear in contracts, in
which a lender takes a security interest in 'all property that the debtor
acquires after consummation of the loan agreement'. Essentially, such a
clause is intended to extend the protection of the creditor to include assets
that the debtor purchases or otherwise acquires after the loan or debt is
incurred.
'Cross default' Agreements - ✔✔this agreement provides that if one
creditor/lessor has multiple agreements with debtor/lessee, if one goes into
default, they all become in default
Guaranty Agreements - ✔✔this document contains all credit support
provided by third parties that are not primary lessees. A lease guarantees
2
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
Documentation Q&A 100% Solved
Describe Security Deposit Clauses - ✔✔Should Include:
-The amount of the security deposit
-Where it will be held
-The interest rate paid on the security deposit if applicable
Reasons that the lessor can keep the security deposit
-How the security deposit will be returned
Acceleration Clause - ✔✔a term that fully matures the performance due
from a party upon a breach of the contract
Disclaimer of warranties clause - ✔✔exculpatory clauses extinguish or limit
liability of a potentially culpable party through the use of disclaimer,
assumption of risk and indemnification clauses as well as releases of
liability. Must be Conspicuous.
Waiver of Defense Clause - ✔✔where the lessee 'agrees not to assert
against an assignee' of the lease payments, any defenses, setoffs, or
1
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
, claims it may have against the lessor, as the original payee under the
lease.
Hell or High Water Clause - ✔✔where the lessee agrees that its payment
obligations under the lease are 'absolute and unconditional' and are not
subject to any defense, setoff, or counterclaim that the lessee may have
against the lessor, its assignee, the manufacture or seller of the equipment,
or against any person for any reason whatsoever-essentially, it agrees to
pay 'come hell or high water'
'After acquired' clauses - ✔✔a clause that may appear in contracts, in
which a lender takes a security interest in 'all property that the debtor
acquires after consummation of the loan agreement'. Essentially, such a
clause is intended to extend the protection of the creditor to include assets
that the debtor purchases or otherwise acquires after the loan or debt is
incurred.
'Cross default' Agreements - ✔✔this agreement provides that if one
creditor/lessor has multiple agreements with debtor/lessee, if one goes into
default, they all become in default
Guaranty Agreements - ✔✔this document contains all credit support
provided by third parties that are not primary lessees. A lease guarantees
2
©JOSHCLAY 2024/2025. YEAR PUBLISHED 2024.
