Code of Alabama - Title 7: Commercial Code - Article 2A - Leases

• Part 1 General Provisions.
• Section 7-2A-101 Short title
  This article shall be known and may be cited as the Uniform Commercial Code - Leases.
• Section 7-2A-102 Scope
  This article applies to any transaction, regardless of form, that creates a lease, as defined in Section 7-2A-103(1)(j).
• Section 7-2A-103 Definitions and index of definitions
  (1) In this article unless the context otherwise requires: (a) "Buyer in ordinary course of business" means a person who in good faith and without...
• Section 7-2A-104 Leases subject to other statutes
  (1) A lease, although subject to this article, is also subject to any applicable: (a) certificate of title statute of this state; (b) certificate of...
• Section 7-2A-105 Territorial application of article to goods covered by certificate of title
  Subject to the provisions of Sections 7-2A-304(3) and 7-2A-305(3), with respect to goods covered by a certificate of title issued under a statute of this...
• Section 7-2A-106 Limitation on power of parties to consumer lease to choose applicable law and judicial forum
  (1) If the law chosen by the parties to a consumer lease is that of a jurisdiction other than a jurisdiction in which (a) the...
• Section 7-2A-107 Waiver or renunciation of claim or right after default
  Any claim or right arising out of an alleged default or breach of warranty may be discharged in whole or in part without consideration by...
• Section 7-2A-108 Unconscionability
  (1) If the court as a matter of law finds a lease contract or any clause of a lease contract to have been unconscionable at...
• Section 7-2A-109 Option to accelerate at will
  (1) A term providing that one party or his or her successor in interest may accelerate payment or performance or require collateral or additional collateral...
• Part 2 Formation and Construction of Lease Contract.
• Section 7-2A-201 Statute of frauds
  (1) A lease contract is not enforceable by way of action or defense unless: (a) the total payments to be made under the lease contract,...
• Section 7-2A-202 Final written expression: parol or extrinsic evidence
  Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties...
• Section 7-2A-203 Seals inoperative
  The affixing of a seal to a writing evidencing a lease contract or an offer to enter into a lease contract does not render the...
• Section 7-2A-204 Formation in general
  (1) A lease contract may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of a...
• Section 7-2A-205 Firm offers
  An offer by a merchant to lease goods to or from another person in a signed writing that by its terms gives assurance it will...
• Section 7-2A-206 Offer and acceptance in formation of lease contract
  (1) Unless otherwise unambiguously indicated by the language or circumstances, an offer to make a lease contract must be construed as inviting acceptance in any...
• Section 7-2A-207 Course of performance or practical construction
  Repealed by Act 2004-524, p. 1070, §3, effective January 1, 2005.
• Section 7-2A-208 Modification, rescission and waiver
  (1) An agreement modifying a lease contract needs no consideration to be binding. (2) A signed lease agreement that excludes modification or rescission except by...
• Section 7-2A-209 Lessee under finance lease as beneficiary of supply contract
  (1) The benefit of a supplier's promises to the lessor under the supply contract and of all warranties, whether express or implied, including those of...
• Section 7-2A-210 Express warranties
  (1) Express warranties by the lessor are created as follows: (a) Any affirmation of fact or promise made by the lessor to the lessee which...
• Section 7-2A-211 Warranties against interference and against infringement; lessee's obligation against infringement
  (1) There is in a lease contract a warranty that for the lease term no person holds a claim to or interest in the goods...
• Section 7-2A-212 Implied warranty of merchantability
  (1) Except in a finance lease, a warranty that the goods will be merchantable is implied in a lease contract if the lessor is a...
• Section 7-2A-213 Implied warranty of fitness for particular purpose
  Except in a finance lease, if the lessor at the time the lease contract is made has reason to know of any particular purpose for...
• Section 7-2A-214 Exclusion or modification of warranties
  (1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit a warranty must be...
• Section 7-2A-215 Cumulation and conflict of warranties express or implied
  Warranties, whether express or implied, must be construed as consistent with each other and as cumulative, but if that construction is unreasonable, the intention of...
• Section 7-2A-216 Third-party beneficiaries of express and implied warranties
  (1) A warranty to or for the benefit of a lessee under this article, whether express or implied, extends to any natural person who may...
• Section 7-2A-217 Identification
  Identification of goods as goods to which a lease contract refers may be made at any time and in any manner explicitly agreed to by...
• Section 7-2A-218 Insurance and proceeds
  (1) A lessee obtains an insurable interest when existing goods are identified to the lease contract even though the goods identified are nonconforming and the...
• Section 7-2A-219 Risk of loss
  (1) Except in the case of a finance lease, risk of loss is retained by the lessor and does not pass to the lessee. In...
• Section 7-2A-220 Effect of default on risk of loss
  (1) Where risk of loss is to pass to the lessee and the time of passage is not stated: (a) If a tender or delivery...
• Section 7-2A-221 Casualty to identified goods
  If a lease contract requires goods identified when the lease contract is made, and the goods suffer casualty without fault of the lessee, the lessor...
• Part 3 Effect of Lease Contract.
• Section 7-2A-301 Enforceability of lease contract
  Except as otherwise provided in this article, a lease contract is effective and enforceable according to its terms between the parties, against purchasers of the...
• Section 7-2A-302 Title to and possession of goods
  Except as otherwise provided in this article, each provision of this article applies whether the lessor or a third party has title to the goods,...
• Section 7-2A-303 Alienability of interests, transfer of rights, etc
  (1) As used in this section, "creation of a security interest" includes the sale of a lease contract that is subject to Article 9A, Secured...
• Section 7-2A-304 Subsequent lease of goods by lessor
  (1) Subject to Section 7-2A-303, a subsequent lessee from a lessor of goods under an existing lease contract obtains, to the extent of the leasehold...
• Section 7-2A-305 Sale or sublease of goods by lessee
  (1) Subject to the provisions of Section 7-2A-303, a buyer or sublessee from the lessee of goods under an existing lease contract obtains, to the...
• Section 7-2A-306 Priority of certain liens arising by operation of law
  If a person in the ordinary course of his or her business furnishes services or materials with respect to goods subject to a lease contract,...
• Section 7-2A-307 Priority over lease contract
  (1) Except as otherwise provided in Section 7-2A-306, a creditor of a lessee takes subject to the lease contract. (2) Except as otherwise provided in...
• Section 7-2A-308 Special rights of creditors
  (1) A creditor of a lessor in possession of goods subject to a lease contract may treat the lease contract as void if as against...
• Section 7-2A-309 Lessor's and lessee's rights when goods become fixtures
  (1) In this section: (a) goods are "fixtures" when they become so related to particular real estate that an interest in them arises under real...
• Section 7-2A-310 Lessor's and lessee's rights when goods become accessions
  (1) Goods are "accessions" when they are installed in or affixed to other goods. (2) The interest of a lessor or a lessee under a...
• Section 7-2A-311 Priority subject to subordination
  Nothing in this article prevents subordination by agreement by any person entitled to priority.
• Part 4 Performance of Lease Contract: Repudiated, Substituted and Excused.
• Section 7-2A-401 Insecurity: Adequate assurance of performance
  (1) A lease contract imposes an obligation on each party that the other's expectation of receiving due performance will not be impaired. (2) If reasonable...
• Section 7-2A-402 Anticipatory repudiation
  (1) If either party repudiates a lease contract with respect to a performance not yet due under the lease contract, the loss of which performance...
• Section 7-2A-403 Retraction of anticipatory repudiation
  (1) Until the repudiating party's next performance is due, the repudiating party can retract the repudiation unless, since the repudiation, the aggrieved party has cancelled...
• Section 7-2A-404 Substituted performance
  (1) If without fault of the lessee, the lessor and the supplier, the agreed berthing, loading, or unloading facilities fail or the agreed type of...
• Section 7-2A-405 Excused performance
  Subject to Section 7-2A-404 on substituted performance, the following rules apply: (a) Delay in delivery or nondelivery in whole or in part by a lessor...
• Section 7-2A-406 Procedure on excused performance
  (1) If the lessee receives notification of a material or indefinite delay or an allocation justified under Section 7-2A-405, the lessee may by written notification...
• Section 7-2A-407 Irrevocable promises: Finance leases
  (1) In the case of a finance lease that is not a consumer lease the lessee's promises under the lease contract become irrevocable and independent...
• Part 5 Default.
• Division A In General.
• Section 7-2A-501 Default: Procedure
  (1) Whether the lessor or the lessee is in default under a lease contract is determined by the lease agreement and this article. (2) If...
• Section 7-2A-502 Notice after default
  Except as otherwise provided in this article or the lease agreement, the lessor or lessee in default under the lease contract is not entitled to...
• Section 7-2A-503 Modification or impairment of rights and remedies
  (1) Except as otherwise provided in this article, the lease agreement may include rights and remedies for default in addition to or in substitution for...
• Section 7-2A-504 Liquidation of damages
  (1) Damages payable by either party for default, or any other act or omission, including indemnity for loss or diminution of anticipated tax benefits or...
• Section 7-2A-505 Cancellation and termination and effect of cancellation, termination, rescission, or fraud on rights and remedies
  (1) On cancellation of the lease contract, all obligations that are still executory on both sides are discharged, but any right based on prior default...
• Section 7-2A-506 Statute of limitations
  (1) An action for default under a lease contract, including breach of warranty or indemnity, must be commenced within 4 years after the cause of...
• Section 7-2A-507 Proof of market rent: Time and place
  (1) Damages based on market rent (Section 7-2A-519 or 7-2A-528) are determined according to the rent for the use of the goods concerned for a...
• Division B Default by Lessor.
• Section 7-2A-508 Lessee's remedies
  (1) If a lessor fails to deliver the goods in conformity to the lease contract (Section 7-2A-509) or repudiates the lease contract (Section 7-2A-402), or...
• Section 7-2A-509 Lessee's rights on improper delivery; rightful rejection
  (1) Subject to the provisions of Section 7-2A-510 on default in installment lease contracts, if the goods or the tender or delivery fail in any...
• Section 7-2A-510 Installment lease contracts: Rejection and default
  (1) Under an installment lease contract a lessee may reject any delivery that is nonconforming if the nonconformity substantially impairs the value of that delivery...
• Section 7-2A-511 Merchant lessee's duties as to rightfully rejected goods
  (1) Subject to any security interest of a lessee (Section 7-2A-508(5)), if a lessor or a supplier has no agent or place of business at...
• Section 7-2A-512 Lessee's duties as to rightfully rejected goods
  (1) Except as otherwise provided with respect to goods that threaten to decline in value speedily (Section 7-2A-511) and subject to any security interest of...
• Section 7-2A-513 Cure by lessor of improper tender or delivery; replacement
  (1) If any tender or delivery by the lessor or the supplier is rejected because it is nonconforming and the time for performance has not...
• Section 7-2A-514 Waiver of lessee's objections
  (1) In rejecting goods, a lessee's failure to state a particular defect that is ascertainable by reasonable inspection precludes the lessee from relying on the...
• Section 7-2A-515 Acceptance of goods
  (1) Acceptance of goods occurs after the lessee has had a reasonable opportunity to inspect the goods and (a) the lessee signifies or acts with...
• Section 7-2A-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...
• Section 7-2A-517 Revocation of acceptance of goods
  (1) A lessee may revoke acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to the lessee if the lessee has...
• Section 7-2A-518 Cover; substitute goods
  (1) After a default by a lessor under the lease contract of the type described in Section 7-2A-508(1), or, if agreed, after other default by...
• Section 7-2A-519 Lessee's damages for nondelivery, repudiation, default, and breach of warranty in regard to accepted goods
  (1) Except as otherwise provided with respect to damages liquidated in the lease agreement (Section 7-2A-504) or otherwise determined pursuant to agreement of the parties...
• Section 7-2A-520 Lessee's incidental and consequential damages
  (1) Incidental damages resulting from a lessor's default include expenses reasonably incurred in inspection, receipt, transportation, and care and custody of goods rightfully rejected or...
• Section 7-2A-521 Lessee's right to specific performance or replevin
  (1) Specific performance may be decreed if the goods are unique or in other proper circumstances. (2) A decree for specific performance may include any...
• Section 7-2A-522 Lessee's right to goods on lessor's insolvency
  (1) Subject to subsection (2) and even though the goods have not been shipped, a lessee who has paid a part or all of the...
• Division C Default by Lessee.
• Section 7-2A-523 Lessor's remedies
  (1) If a lessee wrongfully rejects or revokes acceptance of goods or fails to make a payment when due or repudiates with respect to a...
• Section 7-2A-524 Lessor's right to identify goods to lease contract
  (1) A lessor aggrieved under Section 7-2A-523(1) may: (a) identify to the lease contract conforming goods not already identified if at the time the lessor...
• Section 7-2A-525 Lessor's right to possession of goods
  (1) If a lessor discovers the lessee to be insolvent, the lessor may refuse to deliver the goods. (2) After a default by the lessee...
• Section 7-2A-526 Lessor's stoppage of delivery in transit or otherwise
  (1) A lessor may stop delivery of goods in the possession of a carrier or other bailee if the lessor discovers the lessee to be...
• Section 7-2A-527 Lessor's rights to dispose of goods
  (1) After a default by a lessee under the lease contract of the type described in Section 7-2A-523(1) or 7-2A-523(3)(a) or after the lessor refuses...
• Section 7-2A-528 Lessor's damages for nonacceptance, failure to pay, repudiation, or other default
  (1) Except as otherwise provided with respect to damages liquidated in the lease agreement (Section 7-2A-504) or otherwise determined pursuant to agreement of the parties...
• Section 7-2A-529 Lessor's action for the rent
  (1) After default by the lessee under the lease contract of the type described in Section 7-2A-523(1) or 7-2A-523(3)(a) or, if agreed, after other default...
• Section 7-2A-530 Lessor's incidental damages
  Incidental damages to an aggrieved lessor include any commercially reasonable charges, expenses, or commissions incurred in stopping delivery, in the transportation, care and custody of...
• Section 7-2A-531 Standing to sue third parties for injury to goods
  (1) If a third party so deals with goods that have been identified to a lease contract as to cause actionable injury to a party...
• Section 7-2A-532 Lessor's rights to residual interest
  In addition to any other recovery permitted by this article or other law, the lessor may recover from the lessee an amount that will fully...

Last modified: May 3, 2021