Current as of: 2009
(a) Whether the lessor or the lessee is in default under a lease contract is determined by the lease agreement and this article.
(b) The cumulative effect of individual, insubstantial defaults may substantially impair the value of the whole lease contract to the other party.
(c) If a party is in default under the lease contract, the party seeking enforcement:
(1) Has the rights and remedies under this article and, except as limited by this article, under the lease agreement.
(2) May reduce its claim to judgment or otherwise enforce the lease contract by self-help or any available administrative or judicial procedure or the like, including arbitration or other dispute resolution procedure if agreed to by the parties; and
(3) May enforce the rights granted by and remedies available under other law.
(d) If the lease agreement covers both real property and goods, the party seeking enforcement may proceed (1) under this part as to the goods, or (2) under other applicable law as to both the real property and the goods in accordance with such party's rights and remedies in respect of the real property, in which case this part does not apply.
(e) (1) In this subsection, "electronic self-help" means the use of electronic means to exercise a term of the lease agreement with respect to the lessor's right to take possession of the leased goods or, without removal, to render the leased goods unusable on the lessee's premises, and includes the use of electronic means to locate leased goods.
(2) Electronic self-help is permitted only if the lessee separately agrees to a term of the lease agreement authorizing electronic self-help that requires notice of exercise as provided in subdivision (3) of this subsection. Except in a consumer lease, the lessee is deemed to have separately agreed to a term of the lease agreement authorizing electronic self-help if a clause is included in the lease agreement that specifically states that electronic self-help is authorized.
(3) Before resorting to electronic self-help authorized by a term of the lease agreement, the lessor shall give notice to the lessee stating:
(A) That the lessor intends to resort to electronic self-help as a remedy on or after fifteen days following communication of the notice to the lessee;
(B) The nature of the claimed breach which entitled the lessor to resort to electronic self-help; and
(C) The name, title, address and telephone number of a person representing the lessor with whom the lessee may communicate concerning the lease agreement.
(4) A lessee may recover damages, including incidental damages, caused by wrongful use of electronic self-help. The lessee may also recover consequential damages for wrongful use of electronic self-help even if such damages are excluded by the terms of the lease agreement.
(5) Even if the lessor complies with subdivisions (2) and (3) of this subsection, electronic self-help may not be used if the lessor has reason to know that such use will result in substantial injury or harm to the public health or safety or grave harm to the public interest substantially affecting third parties not involved in the dispute.
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Questions & Answers: Leases (UCC Article 2A)
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