§ 554.13511 — Merchant lessee’s duties as to rightfully rejected goods

Iowa § 554.13511

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 554: UNIFORM COMMERCIAL CODE

Text

1. Subject to any security interest of a lessee (section 554.13508, subsection 5), if a lessor
or a supplier has no agent or place of business at the market of rejection, a merchant lessee,
after rejection of goods in the merchant lessee’s possession or control, shall follow any
reasonable instructions received from the lessor or the supplier with respect to the goods.
In the absence of those instructions, a merchant lessee shall make reasonable efforts to sell,
lease, or otherwise dispose of the goods for the lessor’s or supplier’s account if they threaten
to decline in value speedily. Instructions are not reasonable if on demand indemnity for
expenses is not forthcoming.
2. If a merchant lessee (subsection 1) or any other lessee (section 554.13512) disposes of
goods, the lessee is entitled to reimbursement either from the lessor or the supplier or out
of the proceeds for reasonable expenses of caring for and disposing of the goods and, if the
expenses include no disposition commission, to such commission as is usual in the trade, or
if there is none, to a reasonable sum not exceeding ten percent of the gross proceeds.
3. Incomplyingwiththissectionorsection554.13512, thelesseeisheldonlytogoodfaith.
Good faith conduct hereunder is neither acceptance or conversion nor the basis of an action
for damages.
4. A purchaser who purchases in good faith from a lessee pursuant to this section or

section554.13512takesthegoodsfreeofanyrightsofthelessorandthesuppliereventhough
the lessee fails to comply with one or more of the requirements of this Article.