(a) Except as otherwise provided in subsection (d) of this section and subject to section 42-418, on a lessee's default, the holder may repossess the goods by judicial process or by self-help without a breach of the peace.

(b) After repossession of the goods on a lessee's default, the holder shall apply the realized value of the goods as provided in the lease or, if the lease contains no such provision, in the following order:

(1) Default charges and collection costs imposed under the lease;

(2) Obligations of the lessee that are due or in default under the lease; and

(3) The liability of the lessee on early termination of the lease.

(c) Unless otherwise agreed, a lessee is liable for any deficiency after application of the realized value. The holder may apply to the deficiency a security deposit taken under subdivision (1) of subsection (b) of section 42-409 but shall refund to the lessee any amount of the security deposit remaining after satisfaction of the deficiency.

(d) (1) In this subsection, “electronic self help” means the use of electronic means to exercise a holder's rights pursuant to subsection (a) of this section and “electronic” means relating to technology that has electrical, digital, magnetic or wireless optical electromagnetic properties or similar capabilities. “Electronic self help” includes the use of electronic means to locate the goods.

(2) Electronic self help is permitted only if the lessee separately agrees to a term of the lease authorizing electronic self help that requires notice of exercise as provided in subdivision (3) of this subsection.

(3) Before resorting to electronic self help authorized by a term of the lease, the holder shall give notice to the lessee stating:

(A) That the holder intends to resort to electronic self help as a remedy on or after fifteen days following communication of the notice to the lessee;

(B) The nature of the claimed breach that entitled the holder to resort to self help; and

(C) The name, title, address and telephone number of a person representing the holder with whom the lessee may communicate concerning the goods.

(4) A lessee may recover direct and incidental damages caused by wrongful use of electronic self help. The lessee may also recover consequential damages for wrongful use of electronic self help even if such damages are excluded by the terms of the lease.

(5) Even if the holder complies with subdivisions (2) and (3) of this subsection, electronic self help may not be used if the holder has reason to know that its use will result in substantial injury or harm to the public health or safety or grave harm to the public interest substantially affecting third parties not involved in the dispute.

(P.A. 02-81, S. 30.)

History: P.A. 02-81 effective July 1, 2003.