New York Uniform Commercial Code Law Section 2-A-516 - Effect of Acceptance of Goods; Notice of Default; Burden of Establishing Default After Acceptance; Notice of Claim or Litigation to Person Answerable

Section 2-A-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, other than a consumer lease in
  which  the supplier assisted in the preparation of the lease contract or
  participated in negotiating the terms of the  lease  contract  with  the
  lessor,  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 2-A-211) 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; and

     (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 2-A-211) 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 2-A-211).

Last modified: February 3, 2019