LESSOR'S DAMAGES FOR NONACCEPTANCE, FAILURE TO PAY,

REPUDIATION, OR OTHER DEFAULT

(1) Except as otherwise provided with respect to damages liquidated in the lease agreement (Section 2A-504 of this title) or otherwise determined pursuant to agreement of the parties (subsection (c) of Section 15 of this act and Section 2A-503 of this title), if a lessor elects to retain the goods or a lessor elects to dispose of the goods and the disposition is by lease agreement that for any reason does not qualify for treatment under subsection (2) of Section 2A-527 of this title, or is by sale or otherwise, the lessor may recover from the lessee as damages for a default of the type described in subsection (1) of Section 2A-523 or paragraph (a) of subsection (3) of Section 2A-523, or, if agreed, for other default of the lessee:

(i)accrued and unpaid rent as of the date of default if the lessee has never taken possession of the goods, or, if the lessee has taken possession of the goods, as of the date the lessor repossesses the goods or an earlier date on which the lessee makes a tender of the goods to the lessor,

(ii)the present value as of the date determined under clause (i) of this subsection 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 market rent at the place where the goods are located computed for the same lease term, and

(iii)any incidental damages allowed under Section 2A-530 of this title, less expenses saved in consequence of the lessee's default.

(2) If the measure of damages provided in subsection (1) of this section is inadequate to put a lessor in as good a position as performance would have, the measure of damages is the present value of the profit, including reasonable overhead, the lessor would have made from full performance by the lessee, together with any incidental damages allowed under Section 2A-530 of this title, due allowance for costs reasonably incurred and due credit for payments or proceeds of disposition.

Added by Laws 1988, c. 86, § 75, eff. Nov. 1, 1988. Amended by Laws 1991, c. 117, § 23, eff. Jan. 1, 1992; Laws 2005, c. 139, § 33, eff. Jan. 1, 2006.