Title BC, Business and Commerce Code

Sec. 2A.219. 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) Subject to the provisions of this chapter on the effect of default …

Sec. 2A.220. EFFECT OF DEFAULT ON RISK OF LOSS. (a) Where risk of loss is to pass to the lessee and the time of passage is not stated: (1) 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 wi…

Sec. 2A.221. CASUALTY TO IDENTIFIED GOODS. 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…

Sec. 2A.301. 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 of the parties. Added by Acts 1993, 73rd Leg.…

Sec. 2A.302. TITLE TO AND POSSESSION OF GOODS. Except as otherwise provided in this title, 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, notwiths…

Sec. 2A.303. ALIENABILITY OF PARTY'S INTEREST UNDER LEASE CONTRACT OR OF LESSOR'S RESIDUAL INTEREST IN GOODS; DELEGATION OF PERFORMANCE; TRANSFER OF RIGHTS. (a) As used in this section, "creation of a security interest" includes the sale of a lease contract that is subject to Cha…

Sec. 2A.304. SUBSEQUENT LEASE OF GOODS BY LESSOR. (a) Subject to Section 2A.303 of this chapter, 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 …

Sec. 2A.305. SALE OR SUBLEASE OF GOODS BY LESSEE. (a) Subject to the provisions of Section 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 lesse…

Sec. 2A.306. 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 those goods in the possession of that person given by sta…

Sec. 2A.307. PRIORITY OF LIENS ARISING BY ATTACHMENT OR LEVY ON, SECURITY INTERESTS IN, AND OTHER CLAIMS TO GOODS. (a) Except as otherwise provided in Section 2A.306, a creditor of a lessee takes subject to the lease contract. (b) Except as otherwise provided in Subsection (c) an…

Sec. 2A.308. SPECIAL RIGHTS OF CREDITORS. (a) 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 voids the lease contract under any statut…

Sec. 2A.309. LESSOR'S AND LESSEE'S RIGHTS WHEN GOODS BECOME FIXTURES. (a) In this section: (1) goods are "fixtures" when they become so related to particular real estate that an interest in them arises under real estate law; (2) a "fixture filing" is the filing, in the office whe…

Sec. 2A.310. LESSOR'S AND LESSEE'S RIGHTS WHEN GOODS BECOME ACCESSIONS. (a) Goods are "accessions" when they are installed in or affixed to other goods. (b) The lessor's residual interest in the accessions and the interest of a lessor or a lessee under a lease contract entered in…

Sec. 2A.401. INSECURITY: ADEQUATE ASSURANCE OF PERFORMANCE. (a) A lease contract imposes an obligation on each party that the other's expectation of receiving due performance will not be impaired. (b) If reasonable grounds for insecurity arise with respect to the performance of e…

Sec. 2A.402. ANTICIPATORY REPUDIATION. 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: (1…

Sec. 2A.403. RETRACTION OF ANTICIPATORY REPUDIATION. (a) 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…

Sec. 2A.404. SUBSTITUTED PERFORMANCE. (a) 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 impr…

Sec. 2A.405. EXCUSED PERFORMANCE. Subject to Section 2A.404 on substituted performance, the following rules apply: (1) Delay in delivery or nondelivery in whole or in part by a lessor or a supplier who complies with Subdivisions (2) and (3) is not a default under the lease contra…

Sec. 2A.406. PROCEDURE ON EXCUSED PERFORMANCE. (a) If the lessee receives notification of a material or indefinite delay or an allocation justified under Section 2A.405, the lessee may by written notification to the lessor as to any goods involved, and with respect to all of the …

Sec. 2A.407. IRREVOCABLE PROMISES: FINANCE LEASES. (a) In the case of a finance lease that is not a consumer lease, a term in the lease agreement that provides that the lessee's promises under the lease contract become irrevocable and independent upon the lessee's acceptance of t…

Sec. 2A.501. DEFAULT: PROCEDURE. (a) Whether the lessor or the lessee is in default under a lease contract is determined by the lease agreement and this chapter. (b) If the lessor or the lessee is in default under the lease contract, the party seeking enforcement has rights and r…

Sec. 2A.502. NOTICE AFTER DEFAULT. Except as provided by 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. Added by Acts 1993, 73…

Sec. 2A.503. MODIFICATION OR IMPAIRMENT OF RIGHTS AND REMEDIES. (a) 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 by this chapter and may limit or alter the measur…

Sec. 2A.504. LIQUIDATION OF DAMAGES. (a) 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 …

Sec. 2A.505. CANCELLATION AND TERMINATION AND EFFECT OF CANCELLATION, TERMINATION, RESCISSION, OR FRAUD ON RIGHTS AND REMEDIES. (a) On cancellation of the lease contract, all obligations that are still executory on both sides are discharged, but any right based on prior default o…

Sec. 2A.506. 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 cause of action accrued. By the original lease contract the parties may not expand such period of limita…

Sec. 2A.507. PROOF OF MARKET RENT. (a) Damages based on market rent (Section 2A.519 or 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…

Sec. 2A.508. LESSEE'S REMEDIES. (a) If a lessor fails to deliver the goods in conformity to the lease contract (Section 2A.509) or repudiates the lease contract (Section 2A.402), or a lessee rightfully rejects the goods (Section 2A.509) or justifiably revokes acceptance of the go…

Sec. 2A.509. LESSEE'S RIGHTS ON IMPROPER DELIVERY; RIGHTFUL REJECTION. (a) Subject to the provisions of Section 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 …

Sec. 2A.510. INSTALLMENT LEASE CONTRACTS: REJECTION AND DEFAULT. (a) 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 defe…

Sec. 2A.511. MERCHANT LESSEE'S DUTIES AS TO RIGHTFULLY REJECTED GOODS. Subject to any security interest of a lessee (Section 2A.508(e)), 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 less…

Sec. 2A.512. LESSEE'S DUTIES AS TO RIGHTFULLY REJECTED GOODS. (a) Except as otherwise provided with respect to goods that threaten to decline in value speedily (Section 2A.511) and subject to any security interest of a lessee (Section 2A.508(e)): (1) the lessee, after rejection o…

Sec. 2A.513. CURE BY LESSOR OF IMPROPER TENDER OR DELIVERY; REPLACEMENT. (a) 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 …

Sec. 2A.514. WAIVER OF LESSEE'S OBJECTIONS. (a) 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: (1) if, stated seasonab…

Sec. 2A.515. ACCEPTANCE OF GOODS. (a) Acceptance of goods occurs after the lessee has had a reasonable opportunity to inspect the goods and: (1) 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 conf…

Sec. 2A.516. EFFECT OF ACCEPTANCE OF GOODS; NOTICE OF DEFAULT; BURDEN OF ESTABLISHING DEFAULT AFTER ACCEPTANCE; NOTICE OF CLAIM OR LITIGATION TO PERSON ANSWERABLE OVER. (a) A lessee must pay rent for any goods accepted in accordance with the lease contract, with due allowance for…

Sec. 2A.517. REVOCATION OF ACCEPTANCE OF GOODS. (a) 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: (1) except in the case of a finance lease that is not a consumer lease, …

Sec. 2A.518. COVER; SUBSTITUTE GOODS. (a) After default by a lessor under the lease contract of the type described by Section 2A.508(a), 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 good…

Sec. 2A.519. LESSEE'S DAMAGES FOR NONDELIVERY, REPUDIATION, DEFAULT, AND BREACH OF WARRANTY IN REGARD TO ACCEPTED GOODS. (a) Except as otherwise provided with respect to damages liquidated in the lease agreement (Section 2A.504) or otherwise determined pursuant to agreement of th…

Sec. 2A.520. LESSEE'S INCIDENTAL AND CONSEQUENTIAL DAMAGES. (a) 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 …

Sec. 2A.521. LESSEE'S RIGHT TO SPECIFIC PERFORMANCE, REPLEVIN, AND OTHER REMEDIES. (a) Specific performance may be decreed if the goods are unique or in other proper circumstances. (b) A decree for specific performance may include the terms and conditions as to payment of the ren…

Sec. 2A.522. LESSEE'S RIGHT TO GOODS ON LESSOR'S INSOLVENCY. (a) Subject to Subsection (b) 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 2A.217) on making and keeping…

Sec. 2A.523. LESSOR'S REMEDIES. (a) 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 inst…

Sec. 2A.524. LESSOR'S RIGHT TO IDENTIFY GOODS TO LEASE CONTRACT. (a) A lessor aggrieved under Section 2A.523(a) may: (1) 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 suppl…

Sec. 2A.525. LESSOR'S RIGHT TO POSSESSION OF GOODS. (a) If a lessor discovers the lessee to be insolvent, the lessor may refuse to deliver the goods. (b) After a default by the lessee under the lease contract of the type described by Section 2A.523(a) or (c)(1) or, if agreed, aft…

Sec. 2A.526. LESSOR'S STOPPAGE OF DELIVERY IN TRANSIT OR OTHERWISE. (a) A lessor may stop delivery of goods in the possession of a carrier or other bailee if the lessor discovers the lessee to be insolvent and may stop delivery of carload, truckload, planeload, or larger shipment…