(a) If a lessor fails to deliver the goods in conformity to the lease contract (Section 2A.509) or repudiates the lease contract (Section 2A.402), or a lessee rightfully rejects the goods (Section 2A.509) or justifiably revokes acceptance of the goods (Section 2A.517), then with respect to any goods involved, and with respect to all of the goods if under an installment lease contract and the value of the whole lease contract is substantially impaired (Section 2A.510), the lessor is in default under the lease contract and the lessee may:
(1) cancel the lease contract (Section 2A.505(a));
(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 2A.518 and 2A.520), or recover damages for nondelivery (Sections 2A.519 and 2A.520); or
(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 2A.522); or
(2) in a proper case, obtain specific performance, replevin, detinue, sequestration, claim and delivery, or the like for the goods (Section 2A.521).
Terms Used In Texas Business and Commerce Code 2A.508
- Contract: A legal written agreement that becomes binding when signed.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Goods: means all things that are moveable at the time of identification to the lease contract, or are fixtures (Section Texas Business and Commerce Code 2A.103
- 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 the clause "each delivery is a separate lease" or its equivalent. See Texas Business and Commerce Code 2A.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 Texas Business and Commerce Code 2A.103
- Lease contract: means the total legal obligation that results from the lease agreement as affected by this chapter and any other applicable rules of law. See Texas Business and Commerce Code 2A.103
- Lessee: means a person who acquires the right to possession and use of goods under a lease. See Texas Business and Commerce Code 2A.103
- Lessor: means a person who transfers the right to possession and use of goods under a lease. See Texas Business and Commerce Code 2A.103
(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 Section 2A.519(c).
(d) If a lessor has breached a warranty, whether express or implied, the lessee may recover damages (Section 2A.519(d)).
(e) On rightful rejection or justifiable revocation or 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 Section 2A.527(e).
(f) Subject to the provisions of Section 2A.407, a lessee, on notifying the lessor of the lessee’s intention to do so, may deduct all or 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.