Title 57A, UNIFORM COMMERCIAL CODE

(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 identificat…

(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 chapter on the effect of default on risk of loss in § 57A-2A…

(1) Where 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 leas…

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 chapter, 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. Source: SL 1989, ch 419 , § 1.

Except as otherwise provided in this chapter, each provision of this chapter 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 posse…

(1) Any interest of a party under a lease contract and the lessor's residual interest in the goods may be transferred unless: (a) Except as provided in subsection (3)(a) of this section, the transfer is voluntary and the lease contract prohibits the transfer; or (b) Except as pro…

(1) Subject to the provisions of § 57A-2A-303 , 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 a…

(1) Subject to the provisions of § 57A-2A-303 , 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 provi…

If a person in the ordinary course of his 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 i…

(1) Except as otherwise provided in § 57A-2A-306 , a creditor of a lessee takes subject to the lease contract. (2) Except as otherwise provided in subsection (3) of this section and in §§ 57A-2A-306 and 57A-2A-308 , a creditor of a lessor takes subject to the lease contract unles…

(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 or void under any statute or rule of law, but retention of possession in good faith an…

(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; (b) A "fixture filing" is the filing, in the office where a mortgage on the real estate would be recorded, of a financing sta…

(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) of this se…

(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 adequa…

(1) If either party repudiates a lease contract, other than a consumer lease, 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: (a) For…

(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 cancelled the lease contract or materially changed the aggrieved party's position or otherwise indicated that the ag…

(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 commercially reasonab…

Subject to § 57A-2A-404 , 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 subsections (b) and (c) of this section is not a default under the lease contract if performance a…

(1) If the lessee receives notification of a material or indefinite delay or an allocation justified under § 57A-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…

(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) of this sect…

(1) Whether the lessor or the lessee is in default under a lease contract is determined by the lease agreement and this chapter. (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 chapt…

Except as otherwise provided in this chapter 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. Source: SL 1989, ch 419 , § 1.

(1) Except as otherwise provided in this chapter, the lease agreement may include rights and remedies for default in addition to or in substitution for those provided in this chapter and may limit or alter the measure of damages recoverable under this chapter. (2) Resort to a rem…

(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 four years after the cause of action accrued. In a lease contract that is not a consumer lease, by the original lease contract the parties may reduce the period o…

(1) Damages based on market rent (§ 57A-2A-519 or 57A-2A-528 ) 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 of the default. (2) If evidence…

(1) If a lessor fails to deliver the goods in conformity to the lease contract (§ 57A-2A-509 ) or repudiates the lease contract (§ 57A-2A-402 ), or a lessee rightfully rejects the goods (§ 57A-2A-509 ) or justifiably revokes acceptance of the goods (§ 57A-2A-517 ), then with resp…

(1) Subject to the provisions of § 57A-2A-510 , 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 cannot be cured or the nonconformity is a defect in the required documents; but if the nonconformity does not f…

(1) Subject to any security interest of a lessee (§ 57A-2A-508(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 possession or control, shall follow any reasonable instructions received …

(1) Except as otherwise provided with respect to goods that threaten to decline in value speedily (§ 57A-2A-511 ) and subject to any security interest of a lessee (§ 57A-2A-508(5)): (a) The lessee, after rejection of goods in the lessee's possession, shall hold them with reasonab…

(1) If any tender or delivery by the lessor or the supplier is rejected because it is 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 …

(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 cu…

(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 tak…

(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, other than a c…

(1) A lessee may revoke acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to the lessee if he has accepted it: (a) Except in the case of a finance lease, on the reasonable assumption that its nonconformity would be cured and it has not bee…

(1) After default by a lessor under the lease contract (§ 57A-2A-508(1)), the lessee may cover by making any purchase or lease of or contract to purchase or lease goods in substitution for those due from the lessor. (2) Except as otherwise provided with respect to damages liquida…

(1) Except as otherwise provided with respect to damages liquidated in the lease agreement (§ 57A-2A-504 ) or determined by agreement of the parties (§§ 57A-1-302 and 57A-2A-503 ), if a lessee elects not to cover or a lessee elects to cover and the cover is by lease agreement, wh…

(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 charges, exp…

(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 a right of r…

(1) Subject to subsection (2) of this section 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 (§ 57A-2A-217 ) on making and keeping good a tender of any unpaid portion of the re…

(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 contract the value…

(1) A lessor aggrieved under § 57A-2A-523(1) may: (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; and (b) Dispose of goods (§ 57A-2A-527(…

(1) If a lessor discovers the lessee to be insolvent, the lessor may refuse to deliver the goods. (2) The lessor has on default by the lessee under the lease contract the right to take possession of the goods. If the lease contract so provides, the lessor may require the lessee t…