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Texas Business and Commerce Code - BUS & COM § 2A.512. Lessee's Duties as to Rightfully Rejected Goods

Current as of January 01, 2024 | Updated by Findlaw Staff

(a) Except as otherwise provided with respect to goods that threaten to decline in value speedily (Section 2A.511) and subject to any security interest of a lessee (Section 2A.508(e)):

(1) the lessee, after rejection of goods in the lessee's possession, shall hold them with reasonable care at the lessor's or the supplier's disposition for a reasonable time after the lessee's seasonable notification of rejection;

(2) if the lessor or the supplier gives no instructions within a reasonable time after notification of rejection, the lessee may store the rejected goods for the lessor's or the supplier's account or ship them to the lessor or the supplier or dispose of them for the lessor's or the supplier's account with reimbursement in the manner provided by Subsection (d);  but

(3) the lessee has no further obligations with regard to goods rightfully rejected.

(b) Action by the lessee pursuant to Subsection (a) is not acceptance or conversion.

(c) If a merchant lessee (Section 2A.511) or any other lessee 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 such commission as is usual in the trade, or if there is none, to a reasonable sum not exceeding 10 percent of the gross proceeds.

(d) In complying with this section or Section 2A.511, the lessee is held only to good faith.  Good faith conduct hereunder is neither acceptance or conversion nor the basis of an action for damages.

(e) A purchaser who purchases in good faith from a lessee pursuant to this section or Section 2A.511 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 chapter.

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Cite this article: FindLaw.com - Texas Business and Commerce Code - BUS & COM § 2A.512. Lessee's Duties as to Rightfully Rejected Goods - last updated January 01, 2024 | https://codes.findlaw.com/tx/business-and-commerce-code/bus-com-sect-2a-512/

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