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355.2A-527 Lessor's rights to dispose of goods.
(1)
(2)
(3)
(4)
(5)
After a default by a lessee under the lease contract of the type described in KRS
355.2A-523(1) or 355.2A-523(3)(a) or after the lessor refuses to deliver or takes
possession of goods (KRS 355.2A-525 or 355.2A-526), or, if agreed, after other
default by a lessee, the lessor may dispose of the goods concerned or the
undelivered balance thereof by lease, sale, or otherwise.
Except as otherwise provided with respect to damages liquidated in the lease
agreement (KRS 355.2A-504) or otherwise determined pursuant to agreement of the
parties (KRS 355.1-302 and 355.2A-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:
(a) Accrued and unpaid rent as of the date of the commencement of the term of
the new lease agreement;
(b) 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
(c) Any incidental damages allowed under KRS 355.2A-530, less expenses saved
in consequence of the lessee's default.
If the lessor's disposition is by lease agreement that for any reason does not qualify
for treatment under subsection (2) of this section, 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 KRS 355.2A-528 governs.
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 (1) or more of the requirements of this article.
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 (subsection
(5) of KRS 355.2A-508).
Effective: July 12, 2006
History: Amended 2006 Ky. Acts ch. 242, sec. 31, effective July 12, 2006. -- Amended
1992 Ky. Acts ch. 116, sec. 20, effective January 1, 1993 -- Created 1990 Ky. Acts
ch. 363, sec. 74, effective January 1, 1991.
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