(1) A lease contract imposes an obligation on each party that the other's expectation of receiving due performance will not be impaired.
(2) If reasonable grounds for insecurity arise with respect to the performance of either party, the insecure party may demand in writing adequate assurance of due performance. Until the insecure party receives that assurance, if commercially reasonable the insecure party may suspend any performance for which he has not already received the agreed return.
(3) A repudiation of the lease contract occurs if assurance of due performance adequate under the circumstances of the particular case is not provided to the insecure party within a reasonable time, not to exceed thirty days after receipt of a demand by the other party.
(4) Between merchants, the reasonableness of grounds for insecurity and the adequacy of any assurance offered must be determined according to commercial standards.
(5) Acceptance of any nonconforming delivery or payment does not prejudice the aggrieved party's right to demand adequate assurance of future performance.
History: 1978 Comp., § 55-2A-401, enacted by Laws 1992, ch. 114, § 49.
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 2-609 [55-2-609 NMSA 1978].
Changes: — Revised to reflect leasing practices and terminology. Note that in the analogue to Subsection (3) (Section 2-609(4)) [55-2-609 NMSA 1978], the adjective "justified" modifies demand. The adjective was deleted here as unnecessary, implying no substantive change.
"Aggrieved party". Section 1-201(2) [55-1-201 NMSA 1978].
"Agreed". Section 1-201(3) [55-1-201 NMSA 1978].
"Between merchants". Section 2-104(3) [55-2-104 NMSA 1978].
"Conforming". Section 2A-103(1)(d) [55-2A-103 NMSA 1978].
"Delivery". Section 1-201(14) [55-1-201 NMSA 1978].
"Lease contract". Section 2A-103(1)(l) [55-2A-103 NMSA 1978].
"Party". Section 1-201(29) [55-1-201 NMSA 1978].
"Reasonable time". Section 1-204(1) and (2) [55-1-204 NMSA 1978].
"Receipt". Section 2-103(1)(c) [55-2-103 NMSA 1978].
"Rights". Section 1-201(36) [55-1-201 NMSA 1978].
"Writing". Section 1-201(46) [55-1-201 NMSA 1978].
Effective dates. — Laws 1992, ch. 114, § 238 made Laws 1992, ch. 114, § 49 effective July 1, 1992.
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