336.2A-516 EFFECT OF ACCEPTANCE OF GOODS; NOTICE OF DEFAULT; BURDEN
OF ESTABLISHING DEFAULT AFTER ACCEPTANCE; NOTICE OF CLAIM OR
LITIGATION TO PERSON ANSWERABLE OVER.
(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 article 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
) 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 the following apply:
(a) The lessee may give the lessor or the supplier, or both, written notice of the litigation. If
the notice states that the person notified may come in and defend and that if the person notified
does not do so that person will be bound in any action against that person by the lessee by
any determination of fact common to the two litigations, then unless the person notified after
seasonable receipt of the notice does come in and defend that person 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
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) 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
History: 1989 c 232 art 1 s 2A-516; 1991 c 171 art 1 s 13