NM Stat § 55-2A-503 (2021)
2021 New Mexico Statutes|Chapter 55 - Uniform Commercial Code|Article 2A - Leases|Part 5 - DEFAULT|Section 55-2A-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 those provided in this article and may limit or alter the measure of damages recoverable under this article. (2) Resort to a remedy provided under this article or in the lease agreement is optional unless the remedy is expressly agreed to be exclusive. If circumstances cause an exclusive or limited remedy to fail of its essential purpose, or provision for an exclusive remedy is unconscionable, remedy may be had as provided in this article. (3) Consequential damages may be liquidated under Section 55-2A-504 NMSA 1978, or may otherwise be limited, altered or excluded unless the limitation, alteration or exclusion is unconscionable. Limitation, alteration or exclusion of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation, alteration or exclusion of damages where the loss is commercial is not prima facie unconscionable. (4) Rights and remedies on default by the lessor or the lessee with respect to any obligation or promise collateral or ancillary to the lease contract are not impaired by this article. History: 1978 Comp., § 55-2A-503, enacted by Laws 1992, ch. 114, § 58. 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 2-719 and 2-701 [55-2-719 and 55-2-701 NMSA 1978]. Changes: — Rewritten to reflect lease terminology and to clarify the relationship between this section and Section 2A-504 [55-2A-504 NMSA 1978]. 1. A significant purpose of this Part is to provide rights and remedies for those parties to a lease who fail to provide them by agreement or whose rights and remedies fail of their essential purpose or are unenforceable. However, it is important to note that this implies no restriction on freedom to contract. Sections 2A-103(4) and 1-102(3) [55-2A-103 and 55-1-102 NMSA 1978, respectively]. Thus, subsection (1), a revised version of the provisions of Section 2-719(1) [55-2-719 NMSA 1978], allows the parties to the lease agreement freedom to provide for rights and remedies in addition to or in substitution for those provided in this Article and to alter or limit the measure of damages recoverable under this Article. Except to the extent otherwise provided in this Article (e.g., Sections 2A-105, 106 and 108(1) and (2)) [55-2A-105, 55-2A-106, 55-2A-108 NMSA 1978, respectively], this Part shall be construed neither to restrict the parties' ability to provide for rights and remedies or to limit or alter the measure of damages by agreement, nor to imply disapproval of rights and remedy schemes other than those set forth in this Part. 2. Subsection (2) makes explicit with respect to this Article what is implicit in Section 2-719 [55-2-719 NMSA 1978] with respect to the Article on Sales (Article 2): if an exclusive remedy is held to be unconscionable, remedies under this Article are available. Section 2-719 [55-2-719 NMSA 1978] official comment 1. 3. Subsection (3), a revision of Section 2-719(3) [55-2-719 NMSA 1978], makes clear that consequential damages may also be liquidated. Section 2A-504(1)[55-2A-504 NMSA 1978]. 4. Subsection (4) is a revision of the provisions of Section 2-701 [55-2-701 NMSA 1978]. This subsection leaves the treatment of default with respect to obligations or promises collateral or ancillary to the lease contract to other law. Sections 2A-103(4) and 1-103 [55-2A-103 and 55-1-103 NMSA 1978, respectively]. An example of such an obligation would be that of the lessor to the secured creditor which has provided the funds to leverage the lessor's lease transaction; an example of such a promise would be that of the lessee, as seller, to the lessor, as buyer, in a sale-leaseback transaction. Cross References: — Sections 1-102(3), 1-103, Article 2, especially Sections 2-701, 2-719, 2-719(1), 2-719(3), 2-719 official comment 1, and Sections 2A-103(4), 2A-105, 2A-106, 2A-108(1), 2A-108(2), and 2A-504 [55-1-102, 55-1-103, 55-2-701, 55-2-719, 55-2A-103, 55-2A-105, 55-2A-106, 55-2A-108 and 55-2A-504 NMSA 1978, respectively]. "Agreed". Section 1-201(3) [55-1-201 NMSA 1978]. "Consumer goods". Section 9-109(1) [55-9-109 NMSA 1978]. "Lease agreement". Section 2A-103(1)(k) [55-2A-103 NMSA 1978]. "Lease contract". Section 2A-103(1)(l) [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]. "Person". Section 1-201(30) [55-1-201 NMSA 1978]. "Remedy". Section 1-201(34) [55-1-201 NMSA 1978]. "Rights". Section 1-201(36) [55-1-201 NMSA 1978]. Effective dates. — Laws 1992, ch. 114, § 238 made Laws 1992, ch. 114, § 58 effective July 1, 1992.