(1) If the lessee receives notification of a material or indefinite delay or an allocation justified under Section 55-2A-405 NMSA 1978, the lessee may by written notification to the lessor as to any goods involved, and with respect to all of the goods if under an installment lease contract the value of the whole lease contract is substantially impaired (Section 55-2A-510 NMSA 1978):
(a) terminate the lease contract (Section 55-2A-505(2) NMSA 1978); or
(b) except in a finance lease that is not a consumer lease, modify the lease contract by accepting the available quota in substitution, with due allowance from the rent payable for the balance of the lease term for the deficiency but without further right against the lessor.
(2) If, after receipt of a notification from the lessor under Section 55-2A-405 NMSA 1978, the lessee fails so to modify the lease agreement within a reasonable time not exceeding thirty days, the lease contract lapses with respect to any deliveries affected.
History: 1978 Comp., § 55-2A-406, enacted by Laws 1992, ch. 114, § 54.
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 2-616(1) and (2) [55-2-616 NMSA 1978].
Changes: — Revised to reflect leasing practices and terminology. Note that subsection 1(a) allows the lessee under a lease, including a finance lease, the right to terminate the lease for excused performance (Sections 2A-404 and 2A-405) [55-2A-404 and 55-2A-405 NMSA 1978, respectively]. However, subsection 1(b), which allows the lessee the right to modify the lease for excused performance, excludes a finance lease that is not a consumer lease. This exclusion is compelled by the same policy that led to codification of provisions with respect to irrevocable promises. Section 2A-407 [55-2A-407 NMSA 1978].
"Consumer lease". Section 2A-103(1)(e) [55-2A-103 NMSA 1978].
"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].
"Installment lease contract". Section 2A-103(1)(i) [55-2A-103 NMSA 1978].
"Lease agreement". Section 2A-103(1)(k) [55-2A-103 NMSA 1978].
"Lease contract". Section 2A-103(1)(l) [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].
"Notice". Section 1-201(25) [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].
"Termination". Section 2A-103(1)(z) [55-2A-103 NMSA 1978].
"Value". Section 1-201(44) [55-1-201 NMSA 1978].
"Written". Section 1-201(46) [55-1-201 NMSA 1978].
Effective dates. — Laws 1992, ch. 114, § 238 made Laws 1992, ch. 114, § 54 effective July 1, 1992.
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