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2 chapters · 613 sections in this title.
Mich. Comp. Laws § 440.2866 Warranty; extension to persons in family, household, or to guest; exclusion, modification, or limitation.
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Sec. 2A216. A warranty to or for the benefit of a lessee under this article, whether express or implied, extends to any natural person who is in the family or household of the lessee or who is a guest in the lessee's home if it is reasonable to expect that such person may use, co…
Mich. Comp. Laws § 440.2867 Lease contract; identification of goods; absence of explicit agreement.
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Sec. 2A217. Identification of goods as goods to which a lease contract refers may be made at any time and in any manner explicitly agreed to be the parties. In the absence of explicit agreement, the following determines when identification occurs: (a) When the lease contract is m…
Mich. Comp. Laws § 440.2868 Lease contract; insurable interest in goods.
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Sec. 2A218. (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…
Mich. Comp. Laws § 440.2869 Risk of loss; passage to lessee.
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Sec. 2A219. (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…
Mich. Comp. Laws § 440.2870 Risk of loss; repudiation; default.
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Sec. 2A220. (1) Where risk of loss is to pass to the lessee and the time of passage is not stated, then the following rules apply: (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 t…
Mich. Comp. Laws § 440.2871 Casualty to identified goods before delivery or risk of loss passes.
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Sec. 2A221. 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…
Mich. Comp. Laws § 440.2901 Lease contract; enforcement.
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Sec. 2A301. 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.
Mich. Comp. Laws § 440.2902 Applicability of article; title or possession.
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Sec. 2A302. 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 la…
Mich. Comp. Laws § 440.2903 Security interest; creation; transfer; limitations; rights and remedies; delegation of duties or performance; liability; prohibition.
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Sec. 2A303. (1) As used in this section, "creation of a security interest" includes the sale of a lease contract that is subject to article 9, secured transactions, by reason of section 9109(1)(c). (2) Except as provided in subsection (3) and section 9407, a provision in a lease …
Mich. Comp. Laws § 440.2904 Transfer from lessor to subsequent lessee; power; obtaining rights in ordinary course of business; entrustment; certificate of title.
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Sec. 2A304. (1) Subject to section 2A303, 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 prov…
Mich. Comp. Laws § 440.2905 Transfer from lessee to buyer or sublessee; power; rights; buyer in ordinary course of business; entrustment; certificate of title.
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Sec. 2A305. (1) Subject to section 2A303, 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 provided in…
Mich. Comp. Laws § 440.2906 Materials or services provided with respect to goods subject to lease contract; lien; priority; exception.
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Sec. 2A306. If a person in the ordinary course of his or her 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 …
Mich. Comp. Laws § 440.2907 Creditor of lessee; rights; taking leasehold interest subject to security interest.
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Sec. 2A307. (1) Except as otherwise provided in section 2A306, a creditor of a lessee takes subject to the lease contract. (2) Except as otherwise provided in subsection (3) and in sections 2A306 and 2A308, a creditor of a lessor takes subject to the lease contract unless the cre…
Mich. Comp. Laws § 440.2908 Creditor of lessor or seller; lease or sale contract treated as void; fraudulent retention or possession of goods; security for preexisting claim.
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Sec. 2A308. (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 fait…
Mich. Comp. Laws § 440.2909 Definitions; lease of fixtures; priority of security interests; right to remove goods; reimbursement; perfection by filing financing statement as fixture filing.
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Sec. 2A309. (1) As used 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. (b) A "fixture filing" is the filing, in the office where a record of a mortgage on the real estate wou…
Mich. Comp. Laws § 440.2910 Goods as accessions; priority of interests; right to remove goods; reimbursement.
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Sec. 2A310. (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 became accessions is superior to all interests in the whole except as stated in subsection (4).…
Mich. Comp. Laws § 440.2911 Subordination by agreement.
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Sec. 2A311. Nothing in this article prevents subordination by agreement by any person entitled to priority.
Mich. Comp. Laws § 440.2931 Lease contract; demanding adequate assurance of due performance; repudiation; determination of adequacy; acceptance of nonconforming delivery or payment.
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Sec. 2A401. (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 wr…
Mich. Comp. Laws § 440.2932 Repudiation of lease contract.
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Sec. 2A402. 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 do any of the following: (a) F…
Mich. Comp. Laws § 440.2933 Retraction of repudiation.
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Sec. 2A403. (1) Until the repudiating party's next performance is due, the repudiating party can retract the repudiation unless, since the repudiation, the aggrieved party has canceled the lease contract or materially changed the aggrieved party's position or otherwise indicated …
Mich. Comp. Laws § 440.2934 Substituted performance; tender and acceptance; failure of payment due to government regulation.
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Sec. 2A404. (1) If without fault of the lessee, the lessor and the supplier, the agreed berthing, loading, or unloading facilities fail or the agreed type of carrier becomes unavailable or the agreed manner of delivery otherwise becomes commercially impracticable, but a commercia…
Mich. Comp. Laws § 440.2935 Substituted performance; delay or nondelivery; allocating production and deliveries; notification.
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Sec. 2A405. Subject to section 2A404 on substituted performance, the following rules apply: (a) Delay in delivery or nondelivery in whole or in part by a lessor or a supplier who complies with subdivisions (b) and (c) is not a default under the lease contract if performance as ag…
Mich. Comp. Laws § 440.2936 Notification by lessor of delay or allocation; rights of lessee; lapse of lease contract.
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Sec. 2A406. (1) If the lessee receives notification of a material or indefinite delay or an allocation justified under section 2A405, 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 …
Mich. Comp. Laws § 440.2937 Finance lease other than consumer lease; effect of lessee's promises; acceptance of goods by lessee; enforcement; validity.
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Sec. 2A407. (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)…
Mich. Comp. Laws § 440.2951 Default; rights and remedies; self-help; enforcement covering real property and goods.
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Sec. 2A501. (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 i…
Mich. Comp. Laws § 440.2952 Notice of default or enforcement.
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Sec. 2A502. 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.
Mich. Comp. Laws § 440.2953 Default; rights and remedies provided in lease agreement; optional remedies; liquidation, limitation, alteration or exclusion of consequential damages; collateral or ancillary obligations and promises.
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Sec. 2A503. (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) Res…
Mich. Comp. Laws § 440.2954 Liquidation of damages; reasonableness; restitution; setoff.
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Sec. 2A504. (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 …
Mich. Comp. Laws § 440.2955 Cancellation or termination of lease contract; discharge of executory obligations; material misrepresentation or fraud; rescission, rejection, or return of goods as bar to rights or remedies.
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Sec. 2A505. (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 …
Mich. Comp. Laws § 440.2956 Default; commencement and accrual of action; effect of termination; applicability of section to tolling of statute of limitations or causes of action accrued before effective date of article.
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Sec. 2A506. (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 1 year. (2)…
Mich. Comp. Laws § 440.2957 Damages based on market rent.
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Sec. 2A507. (1) Damages based on market rent (section 2A519 or 2A528) 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 time specified in sections 2A…
Mich. Comp. Laws § 440.2958 Default by lessor; rights and remedies; breach of warranty; security interest for rent, security, and expenses; deduction of damages from rent due.
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Sec. 2A508. (1) If a lessor fails to deliver the goods in conformity to the lease contract (section 2A509) or repudiates the lease contract (section 2A402), or a lessee rightfully rejects the goods (section 2A509) or justifiably revokes acceptance of the goods (section 2A517), th…
Mich. Comp. Laws § 440.2959 Failure of goods or tender or delivery to conform to lease contract; rights of lessee; effectiveness of rejection of goods.
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Sec. 2A509. (1) Subject to the provisions of section 2A510 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 …
Mich. Comp. Laws § 440.2960 Installment lease contract; rejecting nonconforming delivery; conditions requiring acceptance; reinstatement of lease contract.
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Sec. 2A510. (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 cannot be cured or the nonconformity is a defect in the required documents; but if the nonconformit…
Mich. Comp. Laws § 440.2961 Rejection of goods in merchant lessee's possession or control; duties of merchant lessee; right to reimbursement; good faith conduct; purchaser in good faith.
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Sec. 2A511. (1) Subject to any security interest of a lessee (section 2A508(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 his or her possession or control, shall follow any reasonable in…
Mich. Comp. Laws § 440.2962 Rejection of goods in lessee's possession; rights and obligations of lessee.
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Sec. 2A512. (1) Except as otherwise provided with respect to goods that threaten to decline in value speedily (section 2A511) and subject to any security interest of a lessee (section 2A505(5)) the following rules apply: (a) The lessee, after rejection of goods in the lessee's po…
Mich. Comp. Laws § 440.2963 Rejection of goods before expiration of time for performance; rights of lessor or supplier.
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Sec. 2A513. (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…
Mich. Comp. Laws § 440.2964 Rejection of goods; failure of lessee to state particular defect or reserve rights when paying consideration against documents; effect.
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Sec. 2A514. (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 if either of the following applies: (a) If, stated seaso…
Mich. Comp. Laws § 440.2965 Acceptance of goods; opportunity to inspect; conduct; accepting part of unit.
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Sec. 2A515. (1) Acceptance of goods occurs after the lessee has had a reasonable opportunity to inspect the goods and either of the following applies: (a) The lessee signifies or acts with respect to the goods in a manner that signifies to the lessor or the supplier that the good…
Mich. Comp. Laws § 440.2966 Acceptance of goods; rent; revocation prohibited; exception; acceptance of tender; effect of suit against lessee for breach of warranty or other obligation; infringement.
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Sec. 2A516. (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…
Mich. Comp. Laws § 440.2967 Revoking acceptance of nonconforming lot or commercial unit; conditions; notification; rights and duties of lessee.
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Sec. 2A517. (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 cure…
Mich. Comp. Laws § 440.2968 Default by lessor; cover; damages.
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Sec. 2A518. (1) After default by a lessor under the lease contract of the type described in section 2A508(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 those …
Mich. Comp. Laws § 440.2969 Nondelivery or repudiation by lessor; rejection or revocation of acceptance by lessee; damages; measure of damages for market rent, nonconforming tender or delivery, or breach of warranty.
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Sec. 2A519. (1) Except as otherwise provided with respect to damages liquidated in the lease agreement under section 2A504 or otherwise determined pursuant to agreement of the parties under sections 1302 and 2A503, if a lessee elects not to cover or a lessee elects to cover and t…
Mich. Comp. Laws § 440.2970 Default by lessor; incidental and consequential damages.
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Sec. 2A520. (1) Incidental damages resulting from a lessor's default include expenses reasonably incurred in inspection, receipt, transportation, and care and custody of goods rightfully rejected or goods the acceptance of which is justifiably revoked, any commercially reasonable…
Mich. Comp. Laws § 440.2971 Specific performance.
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Sec. 2A521. (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 deems just. (3) A lessee has…
Mich. Comp. Laws § 440.2972 Insolvency of lessor; recovery of conforming goods after receipt of first installment of rent and security.
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Sec. 2A522. (1) Subject to subsection (2) and even though the goods have not been shipped, a lessee who has paid a part or all of the rent and security for goods identified to a lease contract (section 2A217) on making and keeping good a tender of any unpaid portion of the rent a…
Mich. Comp. Laws § 440.2973 Wrongful rejection or revocation; failure to make payment; repudiation; default; rights of lessor; damages; cancellation of lease.
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Sec. 2A523. (1) If a 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, then, with respect to any goods involved, and with respect to all of the goods if under an installment lease contra…
Mich. Comp. Laws § 440.2974 Additional rights of lessor aggrieved under MCL 440.2973(1).
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Sec. 2A524. (1) A lessor aggrieved under section 2A523(1) may do any of the following: (a) Identify to the lease contract conforming goods not already identified if at the time the lessor learned of the default they were in the lessor's or the supplier's possession or control. (b…
Mich. Comp. Laws § 440.2975 Insolvency of lessee; refusal to deliver goods; possession, availability, or disposition of goods; proceeding without judicial process.
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Sec. 2A525. (1) If a lessor discovers the lessee to be insolvent, the lessor may refuse to deliver the goods. (2) After a default by the lessee under the lease contract of the type described in section 2A523(1) or 2A523(3)(a) or, if agreed, after other default by the lessee, the …
Mich. Comp. Laws § 440.2976 Insolvency of lessee; stopping delivery of goods in possession of bailee; conditions; notification; liability for charges or damages; obligation of carrier.
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Sec. 2A526. (1) A lessor may stop delivery of goods in the possession of a carrier or other bailee if the lessor discovers the lessee is insolvent and may stop delivery of carload, truckload, planeload, or larger shipments of express or freight if the lessee repudiates or fails t…