Utah Code 70A-2a-516. Effect of acceptance of goods — Notice of default — Burden of establishing default after acceptance — Notice of claim or litigation to person answerable over
A lessee must pay rent for any goods accepted in accordance with the leasecontract, with due allowance for goods rightfully rejected or not delivered.
Terms Used In Utah Code 70A-2a-516
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. See Utah Code 70A-2a-103
Contract: A legal written agreement that becomes binding when signed.
Finance lease: means a lease in which:
(i)
the lessor does not select, manufacture, or supply the goods;
(ii)
the lessor acquires the goods or the right to possession and use of the goods in connection with the lease; and
(iii)
one of the following occurs:
(A)
the lessee receives a copy of the contract by which the lessor acquired the goods or the right to possession and use of the goods before signing the lease contract;
(B)
the lessee's approval of the contract by which the lessor acquired the goods or the right to possession and use of the goods is a condition to effectiveness of the lease contract;
(C)
the lessee, before signing the lease contract, receives an accurate and complete statement designating the promises and warranties, and any disclaimers of warranties, limitations, or modifications of remedies, or liquidated damages, including those of a third party, such as the manufacturer of the goods, provided to the lessor by the person supplying the goods in connection with or as part of the contract by which the lessor acquired the goods or the right to possession and use of the goods; or
(D)
if the lease is not a consumer lease, the lessor, before the lessee signs the lease contract, informs the lessee in writing:
(I)
of the identity of the person supplying the goods to the lessor, unless the lessee has selected that person and directed the lessor to acquire the goods or the right to possession and use of the goods from that person;
(II)
that the lessee is entitled under this chapter to the promises and warranties, including those of any third party, provided to the lessor by the person supplying the goods in connection with or as part of the contract by which the lessor acquired the goods or the right to possession and use of the goods; and
(III)
that the lessee may communicate with the person supplying the goods to the lessor and receive an accurate and complete statement of those promises and warranties, including any disclaimers and limitations of them or of remedies. See Utah Code 70A-2a-103
Goods: means all things that are movable at the time of identification to the lease contract, or are fixtures. See Utah Code 70A-2a-103
Lease: means a transfer of the right to possession and use of goods for a term, in return for consideration. See Utah Code 70A-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 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 Utah Code 70A-2a-103
Lessee: means a person who acquires the right to possession and use of goods under a lease. See Utah Code 70A-2a-103
Lessor: means a person who transfers the right to possession and use of goods under a lease. See Utah Code 70A-2a-103
Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
Supplier: means a person from whom a lessor buys or leases goods to be leased under a finance lease. See Utah Code 70A-2a-103
A lessee’s acceptance of goods precludes rejection of the goods accepted. In the case of a finance lease other than a consumer lease in which the supplier assisted in the preparation of the lease contract or participated in negotiating the terms of the lease contract with the lessor, if made with knowledge of a nonconformity, acceptance cannot be revoked because of it. In any other case, if made with knowledge of a nonconformity, acceptance cannot be revoked because of it unless the acceptance was on the reasonable assumption that the nonconformity would be seasonably cured. Acceptance does not of itself impair any other remedy provided by this chapter or the lease agreement for nonconformity.
(3)
If a tender has been accepted:
(a)
within a reasonable time after the lessee discovers or should have discovered any default, the lessee shall notify the lessor, or be barred from any remedy against the lessor, and, in addition, in the case of a finance lease, the lessee shall notify the supplier or be barred from any remedy against the supplier;
(b)
within a reasonable time after the lessee receives notice of litigation for infringement or the like, as provided in Section 70A-2a-211, the lessee shall notify the lessor or be barred from any remedy for liability established by the litigation; and
(c)
the burden is on the lessee to establish any default.
(4)
If a lessee is sued for breach of a warranty or other obligation for which a lessor or a supplier is answerable over, the following apply:
(a)
The lessee may give the lessor or the supplier, or both, written notice of the litigation. If the notice states that the lessor or the supplier may come in and defend and that if the lessor or the supplier does not do so, he will be bound in any action against him by the lessee by any determination of fact common to the two litigations, unless the lessor or the supplier, after seasonable receipt of the notice, does come in and so defend.
(b)
The lessor or the supplier may demand in writing that the lessee turn over control of the litigation, including settlement if the claim is one for infringement or the like as provided in Section 70A-2a-211, or else be barred from any remedy. If the demand states that the lessor or the supplier agrees to bear all expense and to satisfy any adverse judgment, then, unless the lessee after seasonable receipt of the demand does turn over control, the lessee is so barred.
(5)
Subsections (3) and (4) apply to any obligation of a lessee to hold the lessor or the supplier harmless against infringement or the like as provided in Section 70A-2a-211.
