Title 42a — Title 42a: Uniform Commercial Code

Sec. 42a-2A-303. Lessee under finance lease as beneficiary of supply contract. (a) The benefit of the supplier's promises to the lessor under a supply contract and of all warranties, whether express or implied, including those of any third party provided in connection with or as …

Sec. 42a-2A-304. Identification. Identification of existing goods as goods to which a lease contract refers may be made at any time and in any manner expressly agreed to by the parties. In the absence of express agreement, identification occurs: (1) If the contract is for the lea…

Sec. 42a-2A-305. Insurance and proceeds. (a) A lessee obtains an insurable interest in existing goods identified to the lease contract even if the goods are nonconforming and the lessee has an option to return or reject them. (b) If a lessee has an insurable interest only by reas…

Sec. 42a-2A-306. Risk of loss. (a) Except in the case of a finance lease, risk of loss is retained by the lessor and does not pass to the lessee. In the case of a finance lease, risk of loss passes to the lessee. (b) If under the lease contract risk of loss will pass to the lesse…

Sec. 42a-2A-307. Casualty to identified goods. If the lease contract requires for its performance goods identified when the lease contract is made and the goods suffer casualty without the fault of the lessee, the lessor or the supplier before delivery or if the goods suffer casu…

Sec. 42a-2A-308. Termination; survival of obligations. (a) Except as otherwise provided in subsection (b) of this section, on the termination of a lease contract, all obligations that are still executory on both sides are discharged. (b) The following survive termination of a lea…

Sec. 42a-2A-401. Enforceability of lease contract. Except as otherwise provided in this title, a lease contract is effective and enforceable according to its terms between the parties, against purchasers of the goods and against creditors. (P.A. 02-131, S. 28.)

Sec. 42a-2A-402. Title to and possession of goods. Except as otherwise provided in this article, the application of this article is not affected by whether the lessor or a third party has title to the goods, by whether the lessor, the lessee, or a third party has possession of th…

Sec. 42a-2A-403. Alienability of party's interest under lease contract or of lessor's residual interest in goods; delegation of performance; transfer of rights. (a) In this section, “creation of a security interest” includes the sale of a lease contract that is subject to article…

Sec. 42a-2A-404. Subsequent lease of goods by lessor. (a) Subject to section 42a-2A-403, a subsequent lessee from a lessor of goods under an existing lease contract obtains, to the extent of the leasehold interest transferred, the leasehold interest that the lessor had or had pow…

Sec. 42a-2A-405. Sale or sublease of goods by lessee. (a) Subject to section 42a-2A-403, 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 h…

Sec. 42a-2A-406. Priority of certain liens arising by operation of law. If a person in the ordinary course of the person's business furnishes services or materials with respect to goods subject to a lease contract, a lien upon such goods in the possession of such person given by …

Sec. 42a-2A-407. Priority of liens arising by attachment or levy on goods. (a) Except as otherwise provided in section 42a-2A-406, a creditor of a lessee takes subject to the lease contract. (b) Except as otherwise provided in subsection (c) of this section and sections 42a-2A-40…

Sec. 42a-2A-408. Special rights of creditors. (a) Except as otherwise provided in subsections (b) and (c) of this section, the rights of creditors of the lessor with respect to goods identified to a lease contract and retained by the lessor are subject to the lessee's rights unde…

Sec. 42a-2A-409. Rights of lessor and lessee when goods become fixures. (a) In this section: (1) “Construction mortgage” means a mortgage to the extent that it secures an obligation incurred for the construction of an improvement on land, including the acquisition cost of the lan…

Sec. 42a-2A-410. Lessor's and lessee's rights when goods become accessions. (a) In this section, “accessions” means goods that are installed in or affixed to other goods. (b) Except as otherwise provided in subsection (c) of this section, the interest of a lessor or a lessee unde…

Sec. 42a-2A-411. Priority subject to subordination. Nothing in this article prevents subordination by agreement by any person entitled to priority. (P.A. 02-131, S. 38.) PART 5 WARRANTIES

Sec. 42a-2A-501. Definitions. In this part: (1) “Damage” means all loss resulting from a breach of warranty, including incidental and consequential damages. (2) “Goods” includes a component incorporated into other goods. (3) “Immediate lessee” means a lessee that has a contract w…

Sec. 42a-2A-502. Warranty against interference and against infringement; lessee's obligation against infringement. (a) Except in a finance lease, a lessor in a lease contract warrants that, except for claims by any person by way of infringement or the like, for the duration of th…

Sec. 42a-2A-503. Express warranties to lessee. (a) Any representation made by the lessor to the lessee, including a representation made in any medium of communication to the public, such as advertising, which relates to the goods and becomes part of the basis of the bargain creat…

Sec. 42a-2A-504. Implied warranty of merchantability. (a) Except in a finance lease and subject to sections 42a-2A-506 and 42a-2A-507, a warranty that the goods are merchantable is implied in a contract for their lease if the lessor is a merchant with respect to goods of that kin…

Sec. 42a-2A-505. Implied warranty of fitness for particular purpose. Except in a finance lease and subject to section 42a-2A-506, if a lessor at the time of contracting has reason to know any particular purpose for which the goods are required and that the lessee is relying on th…

Sec. 42a-2A-506. Disclaimer or modification of warranty. (a) Words or conduct relevant to the creation of an express warranty and words or conduct tending to disclaim or modify an express warranty must be construed wherever reasonable as consistent with each other. However, subje…

Sec. 42a-2A-507. Cumulation and conflict of warranties. Warranties, whether express or implied, must be construed as consistent with each other and as cumulative. However, if such construction is unreasonable, the intention of the parties determines which warranty is dominant. In…

Sec. 42a-2A-508. Extension of express or implied warranty. (a) In a consumer lease contract, a lessor's express or implied warranty made to an immediate consumer lessee extends to any member of the family or household or an invitee to the household of the immediate consumer lesse…

Sec. 42a-2A-601. Right to adequate assurance of performance. (a) A lease contract imposes an obligation on each party not to impair the other's expectation of receiving due performance. If reasonable grounds for insecurity arise with respect to the performance of either party, th…

Sec. 42a-2A-602. Anticipatory repudiation. (a) If either party to a lease contract repudiates a performance not yet due and the loss of performance will substantially impair the value of the lease contract to the other, the aggrieved party may: (1) Await performance by the repudi…

Sec. 42a-2A-603. Retraction of anticipatory repudiation. (a) A repudiating party may retract a repudiation until the repudiating party's next performance is due unless the aggrieved party, after the repudiation, has canceled the lease contract, materially changed the aggrieved pa…

Sec. 42a-2A-604. Substituted performance. (a) If, without the fault of the lessee, lessor or supplier, agreed berthing, loading or unloading facilities or an agreed type of carrier becomes unavailable, or an agreed manner of delivery otherwise becomes commercially impracticable, …

Sec. 42a-2A-605. Excuse by failure of presupposed conditions. (a) Subject to section 42a-2A-604 and subsection (b) of this section, delay in performance or nonperformance by the lessor or supplier is not a default under the lease contract if performance as agreed has been made im…

Sec. 42a-2A-606. Procedure on notice claiming excuse. (a) A party that receives notice of a material or indefinite delay in performance or an allocation permitted under section 42a-2A-307 or 42a-2A-605 as to any delivery concerned, or of a breach of the whole lease contract under…

Sec. 42a-2A-607. Irrevocable promises: Finance leases. (a) In a finance lease that is not a consumer lease, the lessee's promises under the lease contract become irrevocable and independent upon the lessee's acceptance of the goods. (b) A promise that has become irrevocable and i…

Sec. 42a-2A-701. Subject to general limitations. The remedies of the lessee, lessor and other protected persons under this article are subject to the general limitations and principles stated in sections 42a-2A-702 to 42a-2A-715, inclusive. (P.A. 02-131, S. 54.)

Sec. 42a-2A-702. Default: Procedure. (a) Whether the lessor or the lessee is in default under a lease contract is determined by the lease agreement and this article. (b) The cumulative effect of individual, insubstantial defaults may substantially impair the value of the whole le…

Sec. 42a-2A-703. Notice after default. Except as otherwise provided in this article or the lease agreement, a lessor or lessee in default under a lease contract is not entitled to notice of default or notice of enforcement from the other party. (P.A. 02-131, S. 56.)

Sec. 42a-2A-704. Remedies in general. (a) In accordance with section 42a-1-305, the remedies provided in this article must be liberally administered with the purpose of placing the aggrieved party in as good a position as if the other party had fully performed. (b) Unless the lea…

Sec. 42a-2A-705. Measurement of damages in general. If a default occurs, the aggrieved party may recover compensation for the loss resulting in the ordinary course from the default as determined under sections 42a-2A-716 to 42a-2A-737, inclusive, or as determined in any reasonabl…

Sec. 42a-2A-706. Incidental damages. Incidental damages resulting from a default under a lease contract include compensation for any commercially reasonable charges, expenses or commissions with respect to: (1) Inspection, receipt, transportation, care or custody of identified go…

Sec. 42a-2A-707. Consequential damages. Consequential damages resulting from a default include compensation for: (1) Any loss resulting from the aggrieved party's general or particular requirements and needs of which the defaulting party at the time of contracting had reason to k…

Sec. 42a-2A-708. Specific performance. (a) The court may enter a decree for specific performance if the goods or the agreed performance of the defaulting party are unique or in other proper circumstances. In a lease other than a consumer lease, the court may enter a decree for sp…

Sec. 42a-2A-709. Cancellation; effect. (a) An aggrieved party may cancel a lease contract if the conditions of section 42a-2A-716 or 42a-2A-724 are satisfied or the agreement so provides, unless there is a waiver of the default or the right to cancel under section 42a-2A-302 or t…

Sec. 42a-2A-710. Liquidation of damages; deposits. (a) Damages for default or any other act or omission, including indemnity for loss or diminution of anticipated tax benefits or loss or damage to the lessor's residual interest, may be liquidated in the lease agreement but only a…

Sec. 42a-2A-711. Contractual modification of remedy. (a) Except as otherwise provided in this article, the lease agreement may include rights and remedies for default in addition to or in substitution for those provided in this article and may, except in a consumer lease, limit o…

Sec. 42a-2A-712. Remedies for misrepresentation or fraud. Remedies for material misrepresentation or fraud include all remedies available under this article for nonfraudulent default. Rescission or a claim for rescission of a lease contract or rejection or return of the goods doe…

Sec. 42a-2A-713. Proof of market rent. (a) Damages based on market rent are determined according to the rent for the use of the goods concerned for a lease term identical to the remaining period of the original lease agreement and prevailing at the times specified in sections 42a…

Sec. 42a-2A-714. Liability of third parties for injury to goods. (a) If a third party deals with goods identified to a lease contract and causes actionable injury to the goods, the lessor has a right of action against the third party, and the lessee has a right of action against …

Sec. 42a-2A-715. Statute of limitations. (a) An action for default under a lease contract, including breach of warranty or indemnity, must be commenced within four years after the right of action has accrued. Except in a consumer lease or an action for indemnity, the original lea…

Sec. 42a-2A-716. Lessor's remedies in general. (a) If the lessee wrongfully rejects or revokes acceptance of goods or fails to make a payment when due or repudiates with respect to a part or the whole, the lessee is in default under the lease contract with respect to any goods in…

Sec. 42a-2A-717. Lessor's right to possession of goods. (a) Upon a default by the lessee under a lease contract of the type described in subsection (a) or subdivision (1) of subsection (c) of section 42a-2A-716 or, if agreed, upon other default by the lessee, the lessor may take …

Sec. 42a-2A-718. Lessor's right to identify goods to lease contract despite default or to salvage unfinished goods. (a) Upon default by the lessee under the lease contract of the type described in subsection (a) or subdivision (1) of subsection (c) of section 42a-2A-716 or, if ag…