§ 4-2.5-518 — Cover; substitute goods

Colorado § 4-2.5-518

• Jurisdiction: Colorado
• Title 04: Uniform
• Art.: Leases

Text

(1) After a default by a lessor under the
lease contract of the type described in section 4-2.5-508 (1), or, if agreed, after
other default by the lessor, the lessee may cover by making any purchase or lease
of or contract to purchase or lease goods in substitution for those due from the
lessor.

(2) Except as otherwise provided with respect to damages liquidated in the
lease agreement (section 4-2.5-504) or otherwise determined pursuant to
agreement of the parties (sections 4-1-302 and 4-2.5-503), if a lessee's cover is by
lease agreement substantially similar to the original lease agreement and the lease
agreement is made in good faith and in a commercially reasonable manner, the
lessee may recover from the lessor as damages (i) the present value, as of the date
of the commencement of the term of the new lease agreement, of the rent under
the new lease agreement applicable to that period of the new lease term that is
comparable to the then remaining term of the original lease agreement minus the
present value as of the same date of the total rent for the then remaining lease
term of the original lease agreement, (ii) interest on the amount computed under
clause (i) of this subsection (2) from the date of the commencement of the term of
the new lease agreement until the date of entry of judgment at the same rate used
in computing present value, and (iii) any incidental or consequential damages less
expenses saved in consequence of the lessor's default.

(3) If a lessee's cover is by lease agreement that for any reason does not
qualify for treatment under subsection (2) of this section, or is by purchase or
otherwise, the lessee may recover from the lessor as if the lessee had elected not
to cover and section 4-2.5-519 governs.

Legislative History

Source: L. 91: Entire article added, p. 310, � 1, effective July 1, 1992. L. 2006: (2) amended, p. 494, � 19, effective September 1.