70A-2a-518 - Cover -- Substitute goods.
70A-2a-518. Cover -- Substitute goods.
(1) After default by a lessor under the lease contract of the type described in Section70A-2a-508, or if agreed after other default by the lessor, the lessee may cover by making anypurchase or lease of or contract to purchase or lease goods in substitution for those due from thelessor.
(2) Except as otherwise provided with respect to damages liquidated in the leaseagreement as provided in Section 70A-2a-504 or otherwise determined pursuant to agreement ofthe parties as provided in Sections 70A-1a-302 and 70A-2a-503, if a lessee's cover is by leaseagreement substantially similar to the original lease agreement and the lease agreement is madein good faith and in a commercially reasonable manner, the lessee may recover from the lessor asdamages:
(a) the present value, as of the date of the commencement of the term of the new leaseagreement, of the rent under the new lease agreement applicable to that period of the new leaseterm that is comparable to the then remaining term of the original lease agreement, minus thepresent value as of the same date of the total rent for the then remaining lease term of the originallease agreement; and
(b) any incidental or consequential damages less expenses saved in consequence of thelessor's default.
(3) If a lessee's cover is by lease agreement that qualifies for treatment under Subsection(2), the lessee may elect to proceed under Subsection (2) or Section 70A-2a-519. If a lessee'scover is by lease agreement that for any reason does not qualify for treatment under Subsection(2), or is by purchase or otherwise, the lessee may recover from the lessor under Section70A-2a-519 as if the lessee had elected not to cover.
Amended by Chapter 272, 2007 General Session