California Commercial Code 10508 – (a) If a lessor fails to deliver the goods in conformity to the …
(a) If a lessor fails to deliver the goods in conformity to the lease contract (Section 10509) or repudiates the lease contract (Section 10402), or a lessee rightfully rejects the goods (Section 10509) or justifiably revokes acceptance of the goods (Section 10517), then with respect to any goods involved, and with respect to all of the goods if under an installment lease contract the value of the whole lease contract is substantially impaired (Section 10510), the lessor is in default under the lease contract and the lessee may:
(1) Cancel the lease contract (subdivision (a) of Section 10505);
Terms Used In California Commercial Code 10508
- Contract: A legal written agreement that becomes binding when signed.
- contract: means the bargain of the parties in fact, as found in their language or inferred from other circumstances, including course of performance, course of dealing, or usage of trade as provided in Section 1303. See California Commercial Code 1201
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Goods: means all things that are movable at the time of identification to the lease contract, or are fixtures (Section 10309), 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 California Commercial Code 10103
- Installment lease contract: means a lease contract that authorizes or requires the delivery of goods in separate lots to be separately accepted, even though the lease contract contains a clause "each delivery is a separate lease" or its equivalent. See California Commercial Code 10103
- 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
- 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 California Commercial Code 10103
- Lease contract: means the total legal obligation that results from the lease agreement as affected by this division and any other applicable rules of law. See California Commercial Code 10103
- Lessee: means a person who acquires the right to possession and use of goods under a lease. See California Commercial Code 10103
- Lessor: means a person who transfers the right to possession and use of goods under a lease. See California Commercial Code 10103
- Right: includes remedy. See California Commercial Code 1201
- Security interest: includes any interest of a consignor and a buyer of accounts, chattel paper, a payment intangible, or a promissory note in a transaction that is subject to Division 9 (commencing with Section 9101). See California Commercial Code 1201
(2) Recover so much of the rent and security as has been paid and is just under the circumstances;
(3) Cover and recover damages as to all goods affected whether or not they have been identified to the lease contract (Sections 10518 and 10520), or recover damages for nondelivery (Sections 10519 and 10520);
(4) Exercise any other rights or pursue any other remedies provided in the lease contract.
(b) If a lessor fails to deliver the goods in conformity to the lease contract or repudiates the lease contract, the lessee may also:
(1) If the goods have been identified, recover them (Section 10522); or
(2) In a proper case, obtain specific performance or replevy the goods (Section 10521).
(c) If a lessor is otherwise in default under a lease contract, the lessee may exercise the rights and pursue the remedies provided in the lease contract, which may include a right to cancel the lease, and in subdivision (c) of Section 10519.
(d) If a lessor has breached a warranty, whether express or implied, the lessee may recover damages(subdivision (d) of Section 10519).
(e) On rightful rejection or justifiable revocation of acceptance, a lessee has a security interest in goods in the lessee’s possession or control for any rent and security that has been paid and any expenses reasonably incurred in their inspection, receipt, transportation, and care and custody, and may hold those goods and dispose of them in good faith and in a commercially reasonable manner, subject to subdivision (e) of Section 10527.
(f) Subject to the provisions of Section 10407, a lessee, on notifying the lessor of the lessee’s intention to do so, may deduct all or any part of the damages resulting from any default under the lease contract from any part of the rent still due under the same lease contract.
(Amended by Stats. 1991, Ch. 111, Sec. 46. Effective July 15, 1991.)