N.Y. 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 Perso...
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).

Source: Section 2-A-516 — Effect of Acceptance of Goods; Notice of Default; Burden of Establishing Default After Acceptance; Notice of Claim or Litigation to Perso..., https://www.­nysenate.­gov/legislation/laws/UCC/2-A-516 (updated Sep. 22, 2014; accessed May 4, 2024).

2‑A‑501
Default: Procedure 2‑A‑502
Notice After Default 2‑A‑503
Modification or Impairment of Rights and Remedies 2‑A‑504
Liquidation of Damages 2‑A‑505
Cancellation and Termination and Effect of Cancellation, Termination, Rescission, or Fraud on Rights and Remedies 2‑A‑506
Statute of Limitations 2‑A‑507
Proof of Market Rent: Time and Place 2‑A‑508
Lessee’s Remedies 2‑A‑509
Lessee’s Rights on Improper Delivery: Rightful Rejection 2‑A‑510
Installment Lease Contracts: Rejection and Default 2‑A‑511
Merchant Lessee’s Duties as to Rightfully Rejected Goods 2‑A‑512
Lessee’s Duties as to Rightfully Rejected Goods 2‑A‑513
Cure by Lessor of Improper Tender or Delivery 2‑A‑514
Waiver of Lessee’s Objections 2‑A‑515
Acceptance of Goods 2‑A‑516
Effect of Acceptance of Goods 2‑A‑517
Revocation of Acceptance of Goods 2‑A‑518
Cover 2‑A‑519
Lessee’s Damages for Non-delivery, Repudiation, Default, and Breach of Warranty in Regard to Accepted Goods 2‑A‑520
Lessee’s Incidental and Consequential Damages 2‑A‑521
Lessee’s Right to Specific Performance or Replevin 2‑A‑522
Lessee’s Right to Goods on Lessor’s Insolvency 2‑A‑523
Lessor’s Remedies 2‑A‑524
Lessor’s Right to Identify Goods to Lease Contract 2‑A‑525
Lessor’s Right to Possession of Goods 2‑A‑526
Lessor’s Stoppage of Delivery in Transit or Otherwise 2‑A‑527
Lessor’s Rights to Dispose of Goods 2‑A‑528
Lessor’s Damages for Non-acceptance, Failure to Pay, Repudiation, or Other Default 2‑A‑529
Lessor’s Action for the Rent 2‑A‑530
Lessor’s Incidental Damages 2‑A‑531
Standing to Sue Third Parties for Injury to Goods 2‑A‑532
Lessor’s Rights to Residual Interest
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Accessed:
May 4, 2024

Last modified:
Sep. 22, 2014

§ 2-A-516’s source at nysenate​.gov

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