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Simple English definitions for legal terms
merchant lessee
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A quick definition of merchant lessee:
A merchant lessee is someone who rents or leases goods that are similar to the ones they sell in their business. They are a type of tenant who has a legal right to possess and use the property they are leasing. The term "lessee" refers to anyone who has a lease or rental agreement for real or personal property. This means that a merchant lessee is a tenant who is also a business owner and rents goods for their business needs.
A more thorough explanation:
A merchant lessee is a person who leases goods in the ordinary course of business from a person who sells or leases goods of that kind. This person must do so in good faith and without knowledge that the lease is in violation of a third party's ownership rights, security interest, or leasehold interest. The definition excludes pawnbrokers.
For example, if a car dealership leases a car from another dealership to use as a loaner car for customers, they would be considered a merchant lessee because they are in the business of selling and leasing cars and are leasing a car in the ordinary course of business.
Another example would be a restaurant leasing kitchen equipment from a supplier. Since the restaurant is in the business of preparing and serving food, and the supplier is in the business of selling or leasing kitchen equipment, the restaurant would be considered a merchant lessee.