2023 New York Laws › UCC - Uniform Commercial Code › Article 2-A - Leases › Part 5 - Default › 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).