(1) After a default by a lessee under the lease contract of the type described in Section 2A-523(1) or 2A-523(3)(a) or after the lessor refuses to deliver or takes possession of goods (Section 2A-525 or 2A-526), or, if agreed, after other default by a lessee, the lessor may dispose of the goods concerned or the undelivered balance thereof by lease, sale, or otherwise.
     (2) Except as otherwise provided with respect to damages liquidated in the lease agreement (Section 2A-504) or otherwise determined pursuant to agreement of the parties (Sections 1-302 and 2A-503), if the disposition is by lease agreement substantially similar to the original lease agreement and the new lease agreement is made in good faith and in a commercially reasonable manner, the lessor may recover from the lessee as damages (i) accrued and unpaid rent as of the date of the commencement of the term of the new lease agreement, (ii) the present value, as of the same date, of the total rent for the then remaining lease term of the original lease agreement minus the present value, as of the same date, of the rent under the new lease agreement applicable to that period of the new lease term which is comparable to the then remaining term of the original lease agreement, and (iii) any incidental damages allowed under Section 2A-530, less expenses saved in consequence of the lessee’s default.

time of identification to the lease contract, or are fixtures (Section 2A-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 Illinois Compiled Statutes 810 ILCS 5/2A-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: 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 Illinois Compiled Statutes 810 ILCS 5/2A-103 Lease agreement: means the bargain, with respect      to the lease, of the lessor and the lessee in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance as provided in this Article. See Illinois Compiled Statutes 810 ILCS 5/2A-103 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 Illinois Compiled Statutes 810 ILCS 5/2A-103 Lessee: means a person who acquires the right to      possession and use of goods under a lease. See Illinois Compiled Statutes 810 ILCS 5/2A-103 Lessor: means a person who transfers the right      to possession and use of goods under a lease. See Illinois Compiled Statutes 810 ILCS 5/2A-103 Present value: means the amount as of a date      certain of one or more sums payable in the future, discounted to the date certain. See Illinois Compiled Statutes 810 ILCS 5/2A-103      (3) If the lessor’s disposition is by lease agreement that for any reason does not qualify for treatment under subsection (2), or is by sale or otherwise, the lessor may recover from the lessee as if the lessor had elected not to dispose of the goods and Section 2A-528 governs.      (4) A subsequent buyer or lessee who buys or leases from the lessor in good faith for value as a result of a disposition under this Section takes the goods free of the original lease contract and any rights of the original lessee even though the lessor fails to comply with one or more of the requirements of this Article.      (5) The lessor is not accountable to the lessee for any profit made on any disposition. A lessee who has rightfully rejected or justifiably revoked acceptance shall account to the lessor for any excess over the amount of the lessee’s security interest (Section 2A-508(5)).   Previous section Next section    C - Default by Lessee Contents