N.Y. Uniform Commercial Code 2-A-524 – Lessor's Right to Identify Goods to Lease Contract
Section 2-A-524. Lessor's Right to Identify Goods to Lease Contract.
Terms Used In N.Y. Uniform Commercial Code 2-A-524
- Contract: A legal written agreement that becomes binding when signed.
- Goods: means all things that are movable at the time of
identification to the lease contract, or are fixtures
(Section 2-A-309), 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 N.Y. Uniform Commercial Code 2-A-103 - 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 N.Y. Uniform Commercial Code 2-A-103 - 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 contract: means the total legal obligation that
results from the lease agreement as affected by this Article
and any other applicable rules of law. See N.Y. Uniform Commercial Code 2-A-103 - Lessee: means a person who acquires the right to possession
and use of goods under a lease. See N.Y. Uniform Commercial Code 2-A-103 - Lessor: means a person who transfers the right to possession
and use of goods under a lease. See N.Y. Uniform Commercial Code 2-A-103 - Supplier: means a person from whom a lessor buys or leases
goods to be leased under a finance lease. See N.Y. Uniform Commercial Code 2-A-103
(1) After default by the lessee under the lease contract of the type described in Section 2-A-523 (1) or Section 2-A-523 (3)(a) or, if agreed, after other default by the lessee, the lessor 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 (Section 2-A-527(1)) that demonstrably have
been intended for the particular lease contract even though
those goods are unfinished.
(2) If the goods are unfinished, in the exercise of reasonable commercial judgment for the purposes of avoiding loss and of effective realization, an aggrieved lessor or the supplier may either complete manufacture and wholly identify the goods to the lease contract or cease manufacture and lease, sell, or otherwise dispose of the goods for scrap or salvage value or proceed in any other reasonable manner.