Title 11, Chapter 2A, Section 516
( 11-2A-516)
Effect of acceptance of goods; notice of default; burden of establishing default after acceptance; notice of claim or litigation to person answerable over. (1) A lessee must pay rent for any goods accepted in accordance with
the lease contract, with due allowance for goods rightfully rejected
or not delivered. (2) A lessee's acceptance of goods precludes rejection of the goods
accepted. In the case of a finance lease, if made with knowledge of
a nonconformity, acceptance cannot be revoked because of it. In any
other case, if made with knowledge of a nonconformity, acceptance
cannot be revoked because of it unless the acceptance was on the
reasonable assumption that the nonconformity would be seasonably
cured. Acceptance does not of itself impair any other remedy
provided by this article or the lease agreement for nonconformity. (3) If a tender has been accepted: (a) Within a reasonable time after the lessee discovers or should
have discovered any default, the lessee shall notify the lessor
and the supplier, if any, or be barred from any remedy against the
party not notified; (b) Except in the case of a consumer lease, within a reasonable time after the lessee receives notice of litigation for infringement or the like (Code Section 11-2A-211) the lessee shall notify the lessor or be barred from any remedy over for liability established by the litigation; and (c) The burden is on the lessee to establish any default. (4) If a lessee is sued for breach of a warranty or other obligation
for which a lessor or a supplier is answerable over the following
apply: (a) The lessee may give the lessor or the supplier, or both,
written notice of the litigation. If the notice states that the
person notified may come in and defend and that if the person
notified does not do so that person will be bound in any action
against that person by the lessee by any determination of fact
common to the two litigations, then unless the person notified
after seasonable receipt of the notice does come in and defend
that person is so bound. (b) The lessor or the supplier may demand in writing that the lessee turn over control of the litigation including settlement if the claim is one for infringement or the like (Code Section 11-2A-211) or else be barred from any remedy over. If the demand states that the lessor or the supplier agrees to bear all expense and to satisfy any adverse judgment, then unless the lessee after seasonable receipt of the demand does turn over control the lessee is so barred. (5) Subsections (3) and (4) apply to any obligation of a lessee to hold the lessor or the supplier harmless against infringement or the like (Code Section 11-2A-211). |