Ark. Code Ann. § 4-2A-110 (2020)
Terminal rental adjustment clauses for vehicle leases — Not sales or security interests
In the case of motor vehicles and trailers, notwithstanding any other provision of law, a leasing agreement involving a motor vehicle or trailer shall not create a sales transaction or a security interest in the vehicle merely because the lease contains provisions which provide that the rental price is permitted or required to be adjusted under the agreement either upward or downward based upon an amount which may be realized from a sale or other disposition of the vehicle after the end or termination of the lease period.
History. Acts 1997, No. 370, § 1.
Case Notes
Purchase Option.
Where the debtor-in-possession asserted it had an option to purchase three tractors based on parol evidence that was directly contradicted by the express terms of the parties' agreement, the debtor was required to accept or reject the lease under 11 U.S.C. § 365. A terminal rental adjustment clause did not create a purchase option under this section. In re Double G Trucking of the Arklatex, Inc., 432 B.R. 789 (Bankr. W.D. Ark. 2010).