Title 11, Title 11

Warranties, whether express or implied, must be construed as consistent with each other and as cumulative, but if that construction is unreasonable, the intention of the parties determines which warranty is dominant. In ascertaining that intention the following rules apply. [PL 1…

A warranty to or for the benefit of a lessee under this Article, whether express or implied, extends to any person who may reasonably be expected to use, consume or be affected by the goods and who is injured by breach of the warranty. The operation of this section may not be exc…

Identification of goods as goods to which a lease contract refers may be made at any time and in any manner explicitly agreed to by the parties. In the absence of explicit agreement, identification occurs: [PL 1991, c. 805, §4 (NEW).] (1). When the lease contract is made, if the …

(1). A lessee obtains an insurable interest when existing goods are identified to the lease contract even though the goods identified are nonconforming and the lessee has an option to reject them. (2). If a lessee has an insurable interest only by reason of the lessor's identific…

(1). 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. (2). Subject to the provisions of this Article on the effect of default on risk of loss (section …

(1). When risk of loss is to pass to the lessee and the time of passage is not stated: (a). If a tender or delivery of goods so fails to conform to the lease contract as to give a right of rejection, the risk of their loss remains with the lessor, or, in the case of a finance lea…

If a lease contract requires goods identified when the lease contract is made, and the goods suffer casualty without fault of the lessee, the lessor or the supplier before delivery, or the goods suffer casualty before risk of loss passes to the lessee pursuant to the lease agreem…

Except as otherwise provided in this Article, a lease contract is effective and enforceable according to its terms between the parties, against purchasers of the goods and against creditors of the parties.

Except as otherwise provided in this Article, each provision of this Article applies whether the lessor or a third party has title to the goods, and whether the lessor, the lessee or a third party has possession of the goods, notwithstanding any statute or rule of law that posses…

(1). As used in this section, "creation of a security interest" includes the sale of a lease contract that is subject to Article 9‑A, section 9‑1109, subsection (1), paragraph (c). (2). Except as provided in subsection (4) and section 9‑1407, a provision in a lease agreement that…

(1). Subject to section 2‑1303, 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 in the goods that the lessor had or had power to transfer, and, except as provided in s…

(1). Subject to the provisions of section 2‑1303, 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 had power to transfer, and, except as pr…

If a person in the ordinary course of business furnishes services or materials with respect to goods subject to a lease contract, a lien upon those goods in the possession of that person given by statute or rule of law for those materials or services takes priority over any inter…

(1). Except as otherwise provided in section 2‑1306, a creditor of a lessee takes subject to the lease contract. (2). Except as otherwise provided in subsection (3) and in sections 2‑1306 and 2‑1308, a creditor of a lessor takes subject to the lease contract unless the creditor h…

(1). A creditor of a lessor in possession of goods subject to a lease contract may treat the lease contract as void if as against the creditor retention of possession by the lessor is fraudulent under any statute or rule of law, but retention of possession in good faith and curre…

(1). In this section: (a). Goods are "fixtures" when they become so related to particular real estate that an interest in them arises under real estate law; [PL 1991, c. 805, §4 (NEW).] (b). A "fixture filing" is the filing, in the office where a record of a mortgage on the real …

(1). Goods are "accessions" when they are installed in or affixed to other goods. (2). The interest of a lessor or a lessee under a lease contract entered into before the goods become accessions is superior to all interests in the whole except as stated in subsection (4). (3). Th…

Nothing in this Article prevents subordination by agreement by any person entitled to priority.

(1). A lease contract imposes an obligation on each party that the other's expectation of receiving due performance will not be impaired. (2). If reasonable grounds for insecurity arise with respect to the performance of either party, the insecure party may demand in writing adeq…

If either party repudiates a lease contract with respect to a performance not yet due under the lease contract, the loss of which performance will substantially impair the value of the lease contract to the other, the aggrieved party may: [PL 1991, c. 805, §4 (NEW).] (1). For a c…

(1). Until the repudiating party's next performance is due, the repudiating party may retract the repudiation unless, since the repudiation, the aggrieved party has cancelled the lease contract or materially changed the aggrieved party's position or otherwise indicated that the a…

(1). If without fault of the lessee, the lessor and the supplier, the agreed berthing, loading or unloading facilities fail, the agreed type of carrier becomes unavailable or the agreed manner of delivery otherwise becomes commercially impracticable, but a commercially reasonable…

Subject to section 2‑1404 on substituted performance, the following rules apply. [PL 1991, c. 805, §4 (NEW).] (1). Delay in delivery or nondelivery in whole or in part by a lessor or a supplier who complies with subsections (2) and (3) is not a default under the lease contract if…

(1). If the lessee receives notification of a material or indefinite delay or an allocation justified under section 2‑1405, 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,…

(1). In the case of 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. (2). A promise that has become irrevocable and independent under subsection (1): (a). Is …

(1). Whether the lessor or the lessee is in default under a lease contract is determined by the lease agreement and this Article. (2). If the lessor or the lessee is in default under the lease contract, the party seeking enforcement has rights and remedies as provided in this Art…

Except as otherwise provided in this Article or the lease agreement, the lessor or lessee in default under the lease contract is not entitled to notice of default or notice of enforcement from the other party to the lease agreement.

(1). 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 limit or alter the measure of damages recoverable under this Article. (2). Resort to a r…

(1). Damages payable by either party for default or any other act or omission, including indemnity for loss or diminution of anticipated tax benefits or loss or damage to lessor's residual interest, may be liquidated in the lease agreement but only at an amount or by a formula th…

(1). On cancellation of the lease contract, all obligations that are still executory on both sides are discharged, but any right based on prior default or performance survives and the cancelling party also retains any remedy for default of the whole lease contract or any unperfor…

(1). An action for default under a lease contract, including breach of warranty or indemnity, must be commenced within 4 years after the cause of action accrued. By the original lease contract the parties may reduce the period of limitation to not less than one year. (2). A cause…

(1). Damages based on market rent (section 2‑1519 or 2‑1528) are determined according to the rent for the use of the goods concerned for a lease term identical to the remaining lease term of the original lease agreement and prevailing at the times specified in sections 2‑1519 and…

(1). If a lessor fails to deliver the goods in conformity to the lease contract (section 2‑1509) or repudiates the lease contract (section 2‑1402) or a lessee rightfully rejects the goods (section 2‑1509) or justifiably revokes acceptance of the goods (section 2‑1517) then, with …

(1). Subject to the provisions of section 2‑1510 on default in installment lease contracts, if the goods or the tender or delivery fail in any respect to conform to the lease contract, the lessee may reject or accept the goods or accept any commercial unit or units and reject the…

(1). Under an installment lease contract, a lessee may reject any delivery that is nonconforming if the nonconformity substantially impairs the value of that delivery and can not be cured or if the nonconformity is a defect in the required documents; but if the nonconformity does…

(1). Subject to any security interest of a lessee (section 2‑1508, subsection (5)), if a lessor or a supplier has no agent or place of business at the market of rejection, a merchant lessee, after rejection of goods in the merchant lessee's possession or control, shall follow any…

(1). Except as otherwise provided with respect to goods that threaten to decline in value speedily (section 2‑1511), and subject to any security interest of a lessee (section 2‑1508, subsection (5)): (a). The lessee, after rejection of goods in the lessee's possession, shall hold…

(1). If any tender or delivery by the lessor or the supplier is rejected because nonconforming and the time for performance has not yet expired, the lessor or the supplier may seasonably notify the lessee of the lessor's or the supplier's intention to cure and may then make a con…

(1). In rejecting goods, a lessee's failure to state a particular defect that is ascertainable by reasonable inspection precludes the lessee from relying on the defect to justify rejection or to establish default: (a). If, stated seasonably, the lessor or the supplier could have …

(1). Acceptance of goods occurs after the lessee has had a reasonable opportunity to inspect the goods and: (a). The lessee signifies or acts with respect to the goods in a manner that signifies to the lessor or the supplier that the goods are conforming or that the lessee will t…

(1). A lessee must pay rent for any goods accepted in accordance with the lease contract, with due allowance for goods rightfully rejected or not delivered. (2). A lessee's acceptance of goods precludes rejection of the goods accepted. In the case of a finance lease, if made with…

(1). A lessee may revoke acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to the lessee if the lessee has accepted it: (a). Except in the case of a finance lease, on the reasonable assumption that its nonconformity would be cured and it h…

(1). After a default by a lessor under the lease contract of the type described in section 2‑1508, subsection (1), or, if agreed, after other default by the lessor, the lessee may cover by making any purchase or lease of or contract to purchase or lease goods in substitution for …

(1). Except as otherwise provided with respect to damages liquidated in the lease agreement (section 2‑1504), or otherwise determined pursuant to agreement of the parties (section 1‑1302 and section 2‑1503) if a lessee elects not to cover or a lessee elects to cover and the cover…

(1). Incidental damages resulting from a lessor's default include expenses reasonably incurred in inspection, receipt, transportation, care and custody of goods rightfully rejected or goods the acceptance of which is justifiably revoked, any commercially reasonable charges, expen…

(1). Specific performance may be decreed if the goods are unique or in other proper circumstances. (2). A decree for specific performance may include any terms and conditions as to payment of the rent, damages or other relief that the court determines just. (3). A lessee has a ri…