70A-2a-511 - Merchant lessee's duties as to rightfully rejected goods.
70A-2a-511. Merchant lessee's duties as to rightfully rejected goods.
(1) Subject to any security interest of a lessee as provided in Subsection 70A-2a-508(5),if a lessor or a supplier has no agent or place of business at the market of rejection, a merchantlessee, after rejection of goods in his possession or control, shall follow any reasonableinstructions received from the lessor or the supplier with respect to the goods. In the absence ofthose instructions, a merchant lessee shall make reasonable efforts to sell, lease, or otherwisedispose 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 under Subsection (1) or any other lessee under Section70A-2a-512 disposes of goods, he is entitled to reimbursement either from the lessor or thesupplier or out of the proceeds for reasonable expenses of caring for and disposing of the goodsand, if the expenses include no disposition commission, to such commission as is usual in thetrade, or if there is none, to a reasonable sum not exceeding 10% of the gross proceeds.
(3) In complying with this section or Section 70A-2a-512, the lessee is held only to goodfaith. Good faith conduct hereunder is neither acceptance or conversion nor the basis of anaction for damages.
(4) A purchaser who purchases in good faith from a lessee pursuant to this section orSection 70A-2a-512 takes the goods free of any rights of the lessor and the supplier even thoughthe lessee fails to comply with one or more of the requirements of this chapter.
Enacted by Chapter 197, 1990 General Session