North Dakota Code 41-02.1-18 – (2A-209) Lessee under finance lease as beneficiary of supply contract
1. The benefit of the supplier’s promises to the lessor under the supply contract and of all warranties, whether express or implied, including those of any third party provided in connection with or as part of the supply contract, extends to the lessee to the extent of the lessee’s leasehold interest under a finance lease related to the supply contract, but subject to the terms of the warranty and of the supply contract and all of the supplier’s defenses or claims arising therefrom.
Terms Used In North Dakota Code 41-02.1-18
- Contract: A legal written agreement that becomes binding when signed.
- 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
- Rescission: The cancellation of budget authority previously provided by Congress. The Impoundment Control Act of 1974 specifies that the President may propose to Congress that funds be rescinded. If both Houses have not approved a rescission proposal (by passing legislation) within 45 days of continuous session, any funds being withheld must be made available for obligation.
2. The extension of the benefit of the supplier’s promises and warranties to the lessee (subsection 1 of section 41-02.1-09) does not modify the rights and obligations of the parties to the supply contract or impose any duty or liability under the supply contract on the lessee.
3. Any modification or rescission of the supply contract by the supplier and the lessor is effective between the supplier and the lessee unless, before the modification or rescission, the supplier has received notice that the lessee has entered into a finance lease related to the supply contract. Whenever a modification or rescission of the supply contract is effective between the supplier and the lessee, the lessor, in addition to the obligations of the lessor under the lease contract, is treated as having assumed all obligations of the supplier and warranties which were so modified or rescinded as they existed or were available to the lessee prior to modification or rescission.
4. In addition to the extension of the benefit of the supplier’s promises and of warranties to the lessee under subsection 1, the lessee retains all rights that the lessee may have against the supplier which arise from any agreement between the lessee and the supplier or from any other law.