§ 336.2A-511 — Merchant Lessee's Duties as to Rightfully Rejected Goods
Plain-Language Summary
A merchant lessee who rejects goods must follow the lessor's reasonable instructions. If the goods are perishable and there are no instructions, the lessee must make reasonable efforts to sell them.
336.2A-511 MERCHANT LESSEE’S DUTIES AS TO RIGHTFULLY REJECTED GOODS.
(1) Subject to any security interest of a lessee (section 336.2A-508(5)), if a lessor or a supplier has no agent or place of business at the market of rejection, a merchant lessee, after rejection of goods in the lessee’s possession or control, shall follow any reasonable instructions received from the lessor or the supplier with respect to the goods. In the absence of those instructions, a merchant lessee shall make reasonable efforts to sell, lease, or otherwise dispose of the goods for the lessor’s account if they threaten to decline in value speedily. Instructions are not reasonable if on demand indemnity for expenses is not forthcoming.
(2) If a merchant lessee (subsection (1)) or any other lessee (section 336.2A-512) disposes of goods, the lessee is entitled to reimbursement either from the lessor or the supplier or out of the proceeds for reasonable expenses of caring for and disposing of the goods and, if the expenses include no disposition commission, to a commission as is usual in the trade, or if there is none, to a reasonable sum not exceeding ten percent of the gross proceeds.
(3) In complying with this section or section 336.2A-512, the lessee is held only to good faith. Good faith conduct is neither acceptance or conversion nor the basis of an action for damages.
(4) A purchaser who purchases in good faith from a lessee pursuant to this section or section 336.2A-512 takes the goods free of any rights of the lessor and the supplier even though the lessee fails to comply with one or more of the requirements of this article.
History:
1989 c 232 art 1 s 2A-511
History: History: 1989 c 232 art 1 s 2A-511