§ 41-02.1-64 — (2A-516) Effect of acceptance of goods - Notice of default - Burden of establishing default after acceptance - Notice of claim or litigation to person answerable over

North Dakota § 41-02.1-64

• Jurisdiction: North Dakota
• Title 41: Uniform Commercial Code
• Ch. 41-02.1: Leases

Text

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 chapter 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;
b. 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 41-02.1-20) 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:
a. The lessee may give the lessor or the supplier written notice of the litigation. If the
notice states that the lessor or the supplier may come in and defend and that if
the lessor or the supplier does not do so, the lessor or the supplier will be bound
in any action by the lessee by any determination of fact common to the two
litigations, then unless the lessor or the supplier after seasonable receipt of the
notice does come in and defend the lessor or the supplier 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 41-02.1-20) 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. The provisions of subsections 3 and 4 apply to any obligation of a lessee to hold the
lessor or the supplier harmless against infringement or the like (section 41-02.1-20).