57A-2A-527. Lessor's rights to dispose of goods. (1) After a default by a lessee under the lease contract (§ 57A-2A-523(1)) or after the lessor refuses to deliver or takes possession of goods (§§ 57A-2A-525 or 57A-2A-526), the lessor may dispose of the goods concerned or the undelivered balance thereof by lease, sale or otherwise.

(2) Except as otherwise provided with respect to damages liquidated in the lease agreement (§ 57A-2A-504) or determined by agreement of the parties (§§ 57A-1-302 and 57A-2A-503), if the disposition is by lease agreement substantially similar to the original lease agreement and the lease agreement is made in good faith and in a commercially reasonable manner, the lessor may recover from the lessee as damages (a) accrued and unpaid rent as of the date of commencement of the term of the new lease agreement, (b) the present value as of the date of commencement of the term of the new lease agreement of the difference between the total rent of the then remaining lease term of the original lease agreement and the total rent for the lease term of the new lease agreement, and (c) any incidental damages allowed under § 57A-2A-530, less expenses saved in consequence of the lessee's default.

(3) If the lessor's disposition is by lease agreement that qualifies for treatment under subsection (2) of this section, the lessor may elect to proceed under subsection (2) or § 57A-2A-528. If the lessor's disposition is by lease agreement that for any reason does not qualify for treatment under subsection (2) of this section, or is by sale or otherwise, the lessor may recover from the lessee under § 57A-2A-528 as if the lessor had elected not to dispose of the goods.

(4) A subsequent buyer or lessee who buys or leases from the lessor in good faith for value as a result of a disposition under this section takes the goods free of the original lease contract and any rights of the original lessee even though the lessor fails to comply with one or more of the requirements of this chapter.

(5) The lessor is not accountable to the lessee for any profit made on any disposition. A lessee who has rightfully rejected or justifiably revoked acceptance shall account to the lessor for any excess over the amount of the lessee's security interest (§ 57A-2A-508(5)).Source: SL 1989, ch 419, § 1; SL 1990, ch 390, § 23; SL 2008, ch 259, § 33.