California Commercial Code

§ 10527

COM § 10527 Effective Jan 1, 2007Div. 10 · Ch. 5 · Art. 3

Statute text

(a)After a default by a lessee under the lease contract of the type described in subdivision (a) of, or paragraph (1) of subdivision (c) of, Section 10523 or after the lessor refuses to deliver or takes possession of goods (Section 10525 or 10526), or, if agreed, after other default by a lessee, the lessor may dispose of the goods concerned or the undelivered balance thereof by lease, sale, or otherwise.

(b)Except as otherwise provided with respect to damages liquidated in the lease agreement (Section 10504) or otherwise determined pursuant to agreement of the parties (Sections 1302 and 10503), if the disposition is by lease agreement substantially similar to the original lease agreement and the new lease agreement is made in good faith and in a commercially reasonable manner, the lessor may recover from the lessee as damages (1) accrued and unpaid rent as of the date of the commencement of the term of the new lease agreement, (2) the present value, as of the same date, of the total rent for the then remaining lease term of the original lease agreement minus the present value, as of the same date, of the rent under the new lease agreement applicable to that period of the new lease term which is comparable to the then remaining term of the original lease agreement, and (3) any incidental damages allowed under Section 10530, less expenses saved in consequence of the lessee’s default.

(c)If the lessor’s disposition is by lease agreement that for any reason does not qualify for treatment under subdivision (b), or is by sale or otherwise, the lessor may recover from the lessee as if the lessor had elected not to dispose of the goods and Section 10528 governs.

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Legislative history

Amended by Stats. 2006, Ch. 254, Sec. 71. Effective January 1, 2007.