§ 26-1-2.1-527 — Lessor's rights to dispose of goods

Indiana § 26-1-2.1-527

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

Text

(1) After a default by a lessee under the
lease contract of the type described in IC 26-1-2.1-523(1) or IC 26-1-2.1-523(3)(a) or after the lessor refuses to deliver or takes
possession of goods (IC 26-1-2.1-525 or IC 26-1-2.1-526), or, if agreed,
after other default by the lessee, the lessor may dispose of the goods
concerned or the undelivered balance thereof by lease, sale, or
otherwise.
(2) Except as otherwise provided with respect to damages liquidated
in the lease agreement (IC 26-1-2.1-504) or otherwise determined
pursuant to agreement of the parties (IC 26-1-1-102(3) and IC 26-1-2.1-503), if the disposition is by lease agreement substantially
similar to the original lease agreement and the new lease agreement is
made in good faith and in a commercially reasonable manner, the
lessor may recover from the lessee as damages (i) accrued and unpaid
rent as of the date of the commencement of the term of the new lease
agreement, (ii) the present value, as of the same date, of the total rent
for the then remaining lease term of the original lease agreement minus
the present value, as of the same date, of the rent under the new lease
agreement applicable to that period of the new lease term which is
comparable to the then remaining term of the original lease agreement,
and (iii) any incidental damages allowed under IC 26-1-2.1-530, less
expenses saved in consequence of the lessee's default.
(3) If the lessor's disposition is by lease agreement that for any
reason does not qualify for treatment under subsection (2), or is by sale
or otherwise, the lessor may recover from the lessee as if the lessor had
elected not to dispose of the goods and IC 26-1-2.1-528 governs.
(4) A subsequent buyer or lessee who buys or leases from the lessor
in good faith for value as a result of a disposition under this section
takes the goods free of the original lease contract and any rights of the
original lessee even though the lessor fails to comply with one or more
of the requirements of IC 26-1-2.1.
(5) The lessor is not accountable to the lessee for any profit made on
any disposition. A lessee who has rightfully rejected or justifiably
revoked acceptance shall account to the lessor for any excess over the
amount of the lessee's security interest (IC 26-1-2.1-508(5)).

Legislative History

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