400.2A-516. Effect of acceptance of goods--notice of default--burden of establishing default after acceptance--notice of claim or litigation to person answerable over.
Effect of acceptance of goods--notice of default--burden ofestablishing default after acceptance--notice of claim or litigationto person answerable over.
400.2A-516. (1) A lessee must pay rent for any goodsaccepted in accordance with the lease contract, with dueallowance for goods rightfully rejected or not delivered.
(2) A lessee's acceptance of goods precludes rejection ofthe goods accepted. In the case of a finance lease, if made withknowledge of a nonconformity, acceptance cannot be revokedbecause of it. In any other case, if made with knowledge of anonconformity, acceptance cannot be revoked because of it unlessthe acceptance was on the reasonable assumption that thenonconformity would be seasonably cured. Acceptance does not ofitself impair any other remedy provided by this Article or thelease agreement for nonconformity.
(3) If a tender has been accepted:
(a) within a reasonable time after the lessee discovers orshould have discovered any default, the lessee shall notify thelessor and the supplier, if any, or be barred from any remedyagainst the party not notified;
(b) except in the case of a consumer lease, within areasonable time after the lessee receives notice of litigationfor infringement or the like (Section 400.2A-211) the lesseeshall notify the lessor or shall be barred from any remedy overfor 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 otherobligation for which a lessor or a supplier is answerable overthe following apply:
(a) The lessee may give the lessor or the supplier, orboth, written notice of the litigation. If the notice statesthat the person notified may come in and defend and that if theperson notified does not do so that person will be bound in anyaction against that person by the lessee by any determination offact common to the two litigations then unless the personnotified after seasonable receipt of the notice does come in anddefend that person is so bound.
(b) The lessor or the supplier may demand in writing thatthe lessee turn over control of the litigation includingsettlement if the claim is one for infringement or the like(Section 400.2A-211) or else be barred from any remedy over. Ifthe demand states that the lessor or the supplier agrees to bearall expense and to satisfy any adverse judgment, then unless thelessee after seasonable receipt of the demand does turn overcontrol the lessee is so barred.
(5) Subsections (3) and (4) apply to any obligation of alessee to hold the lessor or the supplier harmless againstinfringement or the like (Section 400.2A-211).
(L. 1992 S.B. 448)