(1) There is in a lease contract a warranty that for the lease term no person holds a claim to or interest in the goods that arose from an act or omission of the lessor, other than a claim by way of infringement or the like, which will interfere with the lessee's enjoyment of its leasehold interest.

(2) Except in a finance lease there is in a lease contract by a lessor who is a merchant regularly dealing in goods of the kind a warranty that the goods are delivered free of the rightful claim of any person by way of infringement or the like.

(3) A lessee who furnishes specifications to a lessor or a supplier shall hold the lessor and the supplier harmless against any claim by way of infringement or the like that arises out of compliance with the specifications.

History: 1978 Comp., § 55-2A-211, enacted by Laws 1992, ch. 114, § 27.

OFFICIAL COMMENTS

UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.

Uniform Statutory Source. — Section 2-312 [55-2-312 NMSA 1978].

Changes. — This section is modeled on the provisions of Section 2-312 [55-2-312 NMSA 1978], with modifications to reflect the limited interest transferred by a lease contract and the total interest transferred by a sale. Section 2-312(2) [55-2-312 NMSA 1978], which is omitted here, is incorporated in Section 2A-214 [55-2A-214 NMSA 1978]. The warranty of quiet possession was abolished with respect to sales of goods. Section 2-312 [55-2-312 NMSA 1978] official comment 1. Section 2A-211(1) [55-2A-211 NMSA 1978] reinstates the warranty of quiet possession with respect to leases. Inherent in the nature of the limited interest transferred by the lease - the right to possession and use of the goods - is the need of the lessee for protection greater than that afforded to the buyer. Since the scope of the protection is limited to claims or interests that arose from acts or omissions of the lessor, the lessor will be in position to evaluate the potential cost, certainly a far better position than that enjoyed by the lessee. Further, to the extent the market will allow, the lessor can attempt to pass on the anticipated additional cost to the lessee in the guise of higher rent.

Purposes. — General language was chosen for subsection (1) that expresses the essence of the lessee's expectation: with an exception for infringement and the like, no person holding a claim or interest that arose from an act or omission of the lessor will be able to interfere with the lessee's use and enjoyment of the goods for the lease term. Subsection (2), like other similar provisions in later sections, excludes the finance lessor from extending this warranty; with few exceptions (Sections 2A-210 and 2A-211(1) [55-2A-210 and 55-2A-211 NMSA 1978]), the lessee under a finance lease is to look to the supplier for warranties and the like or, in some cases as to warranties, to the manufacturer if a warranty made by that person is passed on. Subsections (2) and (3) are derived from Section 2-312(3) [55-2-312 NMSA 1978]. These subsections, as well as the analogue, should be construed so that applicable principles of law and equity supplement their provisions. Sections 2A-103(4) and 1-103 [55-2A-103 and 55-1-103 NMSA 1978, respectively].

Cross References. — Sections 2-312, 2-312(1), 2-312(2), 2-312 official comment 1, 2A-210, 2A-211(1) and 2A-214 [55-2-312, 55-2A-210, 55-2A-211 and 55-2A-214 NMSA 1978, respectively].

"Delivery". Section 1-201(14) [55-1-201 NMSA 1978].

"Finance lease". Section 2A-103(1)(g) [55-2A-103 NMSA 1978].

"Goods". Section 2A-103(1)(h) [55-2A-103 NMSA 1978].

"Lease". Section 2A-103(1)(j) [55-2A-103 NMSA 1978].

"Lease contract". Section 2A-103(1)(l) [55-2A-103 NMSA 1978].

"Leasehold interest". Section 2A-103(1)(m) [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". Section 2-104(1) [55-2-104 NMSA 1978].

"Person". Section 1-201(30) [55-1-201 NMSA 1978].

"Supplier". Section 2A-103(1)(x) [55-2A-103 NMSA 1978].

Effective dates. — Laws 1992, ch. 114, § 238 made Laws 1992, ch. 114, § 27 effective July 1, 1992.