(a) An action for default under a lease contract, including breach of warranty or indemnity, must be commenced within four years after the cause of action accrued. By the original lease contract the parties may not expand such period of limitation but, except in the case of a consumer lease, may reduce the period of limitation to not less than one year.
(b) A cause of action for default accrues when the act or omission on which the default or breach of warranty is based is or should have been discovered by the aggrieved party. A cause of action for indemnity accrues:
(1) in the case of an indemnity against liability, when the act or omission on which the claim for indemnity is based is or should have been discovered by the indemnified party; or
(2) in the case of an indemnity against loss or damage, when the person indemnified makes payment thereof.

Terms Used In Texas Business and Commerce Code 2A.506

  • Consumer lease: means a lease that a lessor regularly engaged in the business of leasing or selling makes to a lessee who is an individual and who takes under the lease primarily for a personal, family, or household purpose, if the total payments to be made under the lease contract, excluding payments for options to renew or buy, do not exceed $25,000. See Texas Business and Commerce Code 2A.103
  • Contract: A legal written agreement that becomes binding when signed.
  • Dismissal: The dropping of a case by the judge without further consideration or hearing. Source:
  • 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 Texas Business and Commerce Code 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
  • Person: includes corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity. See Texas Government Code 311.005
  • Prosecute: To charge someone with a crime. A prosecutor tries a criminal case on behalf of the government.
  • Statute of limitations: A law that sets the time within which parties must take action to enforce their rights.
  • Year: means 12 consecutive months. See Texas Government Code 311.005

(c) If an action commenced within the time limited by Subsection (a) is so terminated as to leave available a remedy by another action for the same default or breach of warranty or indemnity, the other action may be commenced after the expiration of the time limited and within six months after the termination of the first action unless the termination resulted from voluntary discontinuance or from dismissal for failure or neglect to prosecute.
(d) This section does not alter the law on tolling of the statute of limitations nor does it apply to causes of action that have accrued before this chapter becomes effective.

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