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.

Terms Used In Arizona Laws 47-2A219

  • Contract: A legal written agreement that becomes binding when signed.
  • Finance lease: means a lease with respect to which:

    (a) The lessor does not select, manufacture or supply the goods;

    (b) The lessor acquires the goods or the right to possession and use of the goods in connection with the lease; and

    (c) One of the following occurs:

    (i) The lessee receives a copy of the contract by which the lessor acquired the goods or the right to possession and use of the goods before signing the lease contract;

    (ii) The lessee's approval of the contract by which the lessor acquired the goods or the right to possession and use of the goods is a condition to effectiveness of the lease contract;

    (iii) The lessee, before signing the lease contract, receives an accurate and complete statement designating the promises and warranties, and any disclaimers of warranties, limitations or modifications of remedies, or liquidated damages, including those of a third party, such as the manufacturer of the goods, provided to the lessor by the person supplying the goods in connection with or as part of the contract by which the lessor acquired the goods or the right to possession and use of the goods; or

    (iv) If the lease is not a consumer lease, the lessor, before the lessee signs the lease contract, informs the lessee in writing of the identity of the person supplying the goods to the lessor, unless the lessee has selected that person and directed the lessor to acquire the goods or the right to possession and use of the goods from that person, that the lessee is entitled under this chapter to the promises and warranties, including those of any third party, provided to the lessor by the person supplying the goods in connection with or as part of the contract by which the lessor acquired the goods or the right to possession and use of the goods, and that the lessee may communicate with the person supplying the goods to the lessor and receive an accurate and complete statement of those promises and warranties, including any disclaimers and limitations of them or of remedies. See Arizona Laws 47-2A103

  • Goods: means all things that are movable at the time of identification to the lease contract, or are fixtures (section 47-2A309), but the term does not include money, documents, instruments, accounts, chattel paper, general intangibles or minerals or the like, including oil and gas, before extraction. See Arizona Laws 47-2A103
  • Lease: means a transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease. See Arizona Laws 47-2A103
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Lessee: means a person who acquires the right to possession and use of goods under a lease. See Arizona Laws 47-2A103
  • Lessor: means a person who transfers the right to possession and use of goods under a lease. See Arizona Laws 47-2A103
  • Supplier: means a person from whom a lessor buys or leases goods to be leased under a finance lease. See Arizona Laws 47-2A103

B. Subject to the provisions of this chapter on the effect of default on risk of loss (section 47-2A220), if risk of loss is to pass to the lessee and the time of passage is not stated, the following rules apply:

1. If the lease contract requires or authorizes the goods to be shipped by carrier and it does not require delivery at a particular destination, the risk of loss passes to the lessee when the goods are duly delivered to the carrier, but if it does require delivery at a particular destination and the goods are there duly tendered while in the possession of the carrier, the risk of loss passes to the lessee when the goods are there duly so tendered as to enable the lessee to take delivery.

2. If the goods are held by a bailee to be delivered without being moved, the risk of loss passes to the lessee on acknowledgment by the bailee of the lessee’s right to possession of the goods.

3. In any case not within paragraph 1 or 2 of this subsection, the risk of loss passes to the lessee on the lessee’s receipt of the goods if the lessor, or, in the case of a finance lease, the supplier, is a merchant. Otherwise the risk passes to the lessee on tender of delivery.

C. Notwithstanding subsections A and B of this section, the parties to the lease may determine the risk of loss by written agreement.

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