A lessee entering into a new lease agreement must be mindful of a waiver-of-defense clause.
Dangers of Waiver-of-Defense Clauses in Leases
A lessee entering into a new lease agreement must be mindful of a waiver-of-defense clause. If a lease agreement contains a waiver-of-defense clause and the lease is later sold or assigned, the purchaser or assignee, if it is a holder in due course, will take the lease free and clear of numerous defenses (including a fraud in the inducement defense) otherwise available to the lessee had the lease not been sold or assigned.
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