§ 25-2A-516. Effect of acceptance of goods; notice of default; burden of establishing default after acceptance; notice of claim or litigation to person answerable over.
§25‑2A‑516. Effect of acceptance of goods; notice of default;burden of establishing default after acceptance; notice of claim or litigationto person answerable over.
(1) A lessee must payrent for any goods accepted in accordance with the lease contract, with dueallowance for goods rightfully rejected or not delivered.
(2) A lessee'sacceptance of goods precludes rejection of the goods accepted. In the case ofa finance lease, if made with knowledge of a nonconformity, acceptance cannotbe revoked because of it. In any other case, if made with knowledge of anonconformity, acceptance cannot be revoked because of it unless the acceptancewas on the reasonable assumption that the nonconformity would be seasonablycured. Acceptance does not of itself impair any other remedy provided by thisArticle or the lease agreement for nonconformity.
(3) If a tender hasbeen accepted:
(a) within a reasonabletime after the lessee discovers or should have discovered any default, thelessee shall notify the lessor and the supplier, if any, or be barred from anyremedy against the party not notified;
(b) except in the caseof a consumer lease, within a reasonable time after the lessee receives noticeof litigation for infringement or the like (G.S. 25‑2A‑211) thelessee shall notify the lessor or be barred from any remedy over for liabilityestablished by the litigation; and
(c) the burden is on thelessee to establish any default.
(4) If a lessee is suedfor breach of a warranty or other obligation for which a lessor or a supplieris answerable over the following apply:
(a) the lessee may givethe lessor or the supplier, or both, written notice of the litigation. If thenotice states that the person notified may come in and defend and that if theperson notified does not do so, that person will be bound in any action againstthat person by the lessee by any determination of fact common to the twolitigations, then, unless the person notified after seasonable receipt of thenotice does come in and defend, that person is so bound.
(b) the lessor or thesupplier may demand in writing that the lessee turn over control of thelitigation, including settlement, if the claim is one for infringement or thelike (G.S. 25‑2A‑211) or else be barred from any remedy over. Ifthe demand states that the lessor or the supplier agrees to bear all expenseand to satisfy any adverse judgment, then, unless the lessee after seasonablereceipt of the demand does turn over control, the lessee is so barred.
(5) Subsections (3) and(4) of this section apply to any obligation of a lessee to hold the lessor orthe supplier harmless against infringement or the like (G.S. 25‑2A‑211).(1993, c. 463, s. 1.)