Procedure on excused performance

84-2a-406. Procedure on excused performance. (1) If the lessee receives notification of a material or indefinite delay or an allocation justified under K.S.A. 84-2a-405, the lessee may by written notification to the lessor as to any goods involved, and with respect to all of the goods if under an installment lease contract the value of the whole lease contract is substantially impaired (K.S.A. 84-2a-510): (a) Terminate the lease contract (K.S.A. 84-2a-505(2)); or (b) except in a finance lease that is not a consumer lease, modify the lease contract by accepting the available quota in substitution, with due allowance from the rent payable for the balance of the lease term for the deficiency but without further right against the lessor. (2) If, after receipt of a notification from the lessor under K.S.A. 84-2a-405, the lessee fails so to modify the lease agreement within a reasonable time not exceeding 30 days, the lease contract lapses with respect to any deliveries affected. History: L. 1991, ch. 295, § 47; February 1, 1992. KANSAS COMMENT, 1996 This section complements section 84-2a-405 by specifying the actions a lessee may take upon receiving notice of excuse under the preceding section. The section contains several changes from section 84-2-616, the statutory analogue. First, the option to modify the lease under paragraph (1)(b) is not available to lessees in a finance lease that is not a consumer lease. This change is based on the nature of a finance lease, under which the lessee looks to the supplier for performance; an excuse available to a supplier should not, in the view of the drafters, permit the lessee to modify unilaterally its lease contract with the lessor. See also 84-2a-407. Second, this section omits section 84-2-616(3), which provides that the parties generally may not negate the provisions of section 84-2-616 by agreement. The Official Comments do not specifically address this change, although presumably it is based on the general policy of Article 2A in favor of freedom of contract.