§ 336.2A-219 — Risk of Loss
Plain-Language Summary
Except in a finance lease, the lessor keeps the risk of loss and it does not pass to the lessee; in a finance lease, the risk of loss passes to the lessee. When the risk is to pass to the lessee but the lease does not say when, default timing rules apply (subject to the default-on-risk-of-loss provisions of section 336.2A-220). If goods are shipped by carrier, risk passes when they are delivered to the carrier, or, if delivery at a particular destination is required, when they are duly tendered there; if a bailee holds the goods without moving them, risk passes when the bailee acknowledges the lessee's right to possession; otherwise risk passes on the lessee's receipt of the goods if the lessor or supplier is a merchant, and on tender of delivery if not.
336.2A-219 RISK OF LOSS.
(1) Except in the case of a finance lease, risk of loss is retained by the lessor and does not pass to the lessee. In the case of a finance lease, risk of loss passes to the lessee.
(2) Subject to the provisions of this article on the effect of default on risk of loss (section 336.2A-220), if risk of loss is to pass to the lessee and the time of passage is not stated, the following rules apply:
(a) If the lease contract requires or authorizes the goods to be shipped by carrier
(i) and it does not require delivery at a particular destination, the risk of loss passes to the lessee when the goods are duly delivered to the carrier; but
(ii) if it does require delivery at a particular destination and the goods are there duly tendered while in the possession of the carrier, the risk of loss passes to the lessee when the goods are there duly so tendered as to enable the lessee to take delivery.
(b) If the goods are held by a bailee to be delivered without being moved, the risk of loss passes to the lessee on acknowledgment by the bailee of the lessee’s right to possession of the goods.
(c) In any case not within subsection (a) or (b), the risk of loss passes to the lessee on the lessee’s receipt of the goods if the lessor, or, in the case of a finance lease, the supplier, is a merchant; otherwise the risk passes to the lessee on tender of delivery.
History:
1989 c 232 art 1 s 2A-219
History: History: 1989 c 232 art 1 s 2A-219