§12A-2A-516. Effect of Acceptance of Goods; Notice of Default;
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Burden of Establishing Default After Acceptance; Notice of Claim or Litigation to Person Answerable Over.
EFFECT OF ACCEPTANCE OF GOODS; NOTICE OF DEFAULT;
BURDEN OF ESTABLISHING DEFAULT AFTER ACCEPTANCE;
NOTICE OF CLAIM OR LITIGATION TO PERSON
ANSWERABLE OVER
(1)A lessee must pay rent for any goods accepted in accordance with the lease contract, with due allowance for goods rightfully rejected or not delivered.
(2)A lessee's acceptance of goods precludes rejection of the goods accepted. In the case of a finance lease, 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 article 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 and the supplier, if any, or be
barred from any remedy against the party not notified;
except in the case of a consumer lease, within a
reasonable time after the lessee receives notice of
litigation for infringement or the like (Section 2A-
211 of this title) the lessee shall notify the lessor
or be barred from any remedy over 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 person notified may come in and defend
and that if the person notified does not do so that
person will be bound in any action against that person
by the lessee by any determination of fact common to
the two litigations, then unless the person notified
after seasonable receipt of the notice does come in
and defend that person is so bound.
(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 (Section 2A-211 of this
title) or else be barred from any remedy over. 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)of this section apply to any obligation of a lessee to hold the lessor or the supplier harmless against infringement or the like (Section 2A-211 of this title). Added by Laws 1988, c. 86, § 63, eff. Nov. 1, 1988. Amended by Laws 1991, c. 117, § 16, eff. Jan. 1, 1992.