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This entry was published on 2014-09-22
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Lessee's Remedies
Uniform Commercial Code (UCC) CHAPTER 38, ARTICLE 2-A, PART 5
Section 2-A-508. Lessee's Remedies.

(1) If a lessor fails to deliver the goods in conformity to the lease
contract (Section 2-A-509) or repudiates the lease contract (Section
2-A-402), or a lessee rightfully rejects the goods (Section 2-A-509) or
justifiably revokes acceptance of the goods (Section 2-A-517), then with
respect to any goods involved, and with respect to all of the goods if
under an installment lease contract the value of the whole lease
contract is substantially impaired (Section 2-A-510), the lessor is in
default under the lease contract and the lessee may:

(a) cancel the lease contract (Section 2-A-505 (1));

(b) recover so much of the rent and security as has been paid and is
just under the circumstances;

(c) cover and recover damages as to all goods affected whether or not
they have been identified to the lease contract (Sections 2-A-518 and
2-A-520), or recover damages for nondelivery (Sections 2-A-519 and

(d) exercise any other rights or pursue any other remedies provided in
the lease contract.

(2) If a lessor fails to deliver the goods in conformity to the lease
contract or repudiates the lease contract, the lessee may also:

(a) if the goods have been identified, recover them (Section 2-A-522);

(b) in a proper case, obtain specific performance or replevy the goods
(Section 2-A-521).

(3) If a lessor is otherwise in default under a lease contract, the
lessee may exercise the rights and pursue the remedies provided in the
lease contract, which may include a right to cancel the lease, and in
Section 2-A-519(3).

(4) If a lessor has breached a warranty, whether express or implied,
the lessee may recover damages (Section 2-A-519(4)).

(5) On rightful rejection or justifiable revocation of acceptance, a
lessee has a security interest in goods in the lessee's possession or
control for any rent and security interest that has been paid and any
expenses reasonably incurred in their inspection, receipt,
transportation, and care and custody and may hold those goods and
dispose of them in good faith and in a commercially reasonable manner,
subject to Section 2-A-527(5).

(6) Subject to the provisions of Section 2-A-407, a lessee, on
notifying the lessor of the lessee's intention to do so, may deduct all
or any part of the damages resulting from any default under the lease
contract from any part of the rent still due under the same lease