§ 26-1-2.1-511 — Merchant lessee's duties as to rightfully rejected goods

Indiana § 26-1-2.1-511

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 2.1: Leases

Text

(1) Subject to any security interest of a
lessee (IC 26-1-2.1-508(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 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 (IC 26-1-2.1-512) disposes of goods, the merchant 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 (10%) of the gross proceeds.
(3) In complying with this section or IC 26-1-2.1-512, the lessee is
held only to good faith. 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 IC 26-1-2.1-512 takes the goods free of any rights of
the lessor and the supplier even though the lessee fails to comply with
one or more of the requirements of IC 26-1-2.1.

Legislative History

As added by P.L.189-1991, SEC.3.