NM Stat § 55-2A-511 (2021)
2021 New Mexico Statutes|Chapter 55 - Uniform Commercial Code|Article 2A - Leases|Part 5 - DEFAULT|Section 55-2A-511 - Merchant lessee's duties as to rightfully rejected goods.

(1) Subject to any security interest of a lessee (Section 55-2A-508(5) NMSA 1978), if a lessor or a supplier has no agent or place of business at the market of rejection, a merchant lessee, after rejection of goods in his possession or control, shall follow any reasonable instructions received from the lessor or the supplier with respect to the goods. In the absence of those instructions a merchant lessee shall make reasonable efforts to sell, lease or otherwise dispose of the goods for the lessor's account if they threaten to decline in value speedily. Instructions are not reasonable if on demand indemnity for expenses is not forthcoming. (2) If a merchant lessee (Subsection (1)) or any other lessee (Section 55-2A-512 NMSA 1978) disposes of goods, he is entitled to reimbursement either from the lessor or the supplier or out of the proceeds for reasonable expenses of caring for and disposing of the goods and, if the expenses include no disposition commission, to such commission as is usual in the trade, or if there is none, to a reasonable sum not exceeding ten percent of the gross proceeds. (3) In complying with this section or Section 55-2A-512 NMSA 1978, the lessee is held only to good faith. Good faith conduct hereunder is neither acceptance or conversion nor the basis of an action for damages. (4) A purchaser who purchases in good faith from a lessee pursuant to this section or Section 55-2A-512 NMSA 1978 takes the goods free of any rights of the lessor and the supplier even though the lessee fails to comply with one or more of the requirements of this article. History: 1978 Comp., § 55-2A-511, enacted by Laws 1992, ch. 114, § 66. ANNOTATIONSOFFICIAL COMMENTS UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved. Uniform Statutory Source: — Sections 2-603 and 2-706(5) [55-2-603 and 55-2-706 NMSA 1978, respectively]. Changes: — Revised to reflect leasing practices and terminology. This section, by its terms, applies to merchants as well as others. Thus, in construing the section it is important to note that under this Act the term good faith is defined differently for merchants (Section 2-103(1)(b)) [55-2-103 NMSA 1978] than for others (Section 1-201(19)) [55-1-201 NMSA 1978]. Section 2A-103(3) and (4) [55-2A-103 NMSA 1978]. "Action". Sections 1-201(1) [55-1-201 NMSA 1978]. "Good faith". Sections 1-201(19) and 2-103(1)(b) [55-1-201 and 55-2-103 NMSA 1978, respectively]. "Goods". Section 2A-103(1)(h) [55-2A-103 NMSA 1978]. "Lease". Section 2A-103(1)(j) [55-2A-103 NMSA 1978]. "Lessee". Section 2A-103(1)(n) [55-2A-103 NMSA 1978]. "Lessor". Section 2A-103(1)(p) [55-2A-103 NMSA 1978]. "Merchant lessee". Section 2A-103(1)(t) [55-2A-103 NMSA 1978]. "Purchaser". Section 1-201(33) [55-1-201 NMSA 1978]. "Rights". Section 1-201(36) [55-1-201 NMSA 1978]. "Security interest". Section 1-201(37) [55-1-201 NMSA 1978]. "Supplier". Section 2A-103(1)(x) [55-2A-103 NMSA 1978]. "Value". Section 1-201(44) [55-1-201 NMSA 1978]. Effective dates. — Laws 1992, ch. 114, § 238 made Laws 1992, ch. 114, § 66 effective July 1, 1992.