(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.
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Terms Used In Alabama Code 7-2A-516

  • Consumer lease: means a lease that a lessor regularly engaged in the business of leasing or selling makes to a lessee who is an individual and who takes under the lease primarily for a personal, family, or household purpose, if the total payments to be made under the lease contract, excluding payments for options to renew or buy, do not exceed $100,000. See Alabama Code 7-2A-103
  • Contract: A legal written agreement that becomes binding when signed.
  • Finance lease: means a lease with respect to which:
    (i) the lessor does not select, manufacture, or supply the goods;
    (ii) the lessor acquires the goods or the right to possession and use of the goods in connection with the lease; and
    (iii) one of the following occurs:
    (A) the lessee receives a copy of the contract by which the lessor acquired the goods or the right to possession and use of the goods before signing the lease contract;
    (B) the lessee's approval of the contract by which the lessor acquired the goods or the right to possession and use of the goods is a condition to effectiveness of the lease contract;
    (C) the lease contract or a separate accurate and complete statement delivered to the lessee discloses in writing (a) all express warranties and other rights provided to the lessee by the lessor and the supplier in connection with the lease contract (b) that there are no other express warranties or rights provided to the lessee by the lessor or the supplier in connection with the lease contract, and (c) in a consumer lease, any waiver, disclaimer, or other negation of express or implied warranties and any limitation or modification of remedy or liquidation of damages for breach of those warranties or other rights of the lessee in a manner as provided in this article or in Article 2, as applicable; or
    (D) the lessor, before the lessee signs the lease contract, informs the lessee in writing (a) of the identity of the supplier, unless the lessee has selected the supplier and directed the lessor to purchase the goods from the supplier, (b) that the lessee is entitled under this article to all warranties and other rights provided to the lessee by the supplier in connection with the lease contract, and (c) to contact the supplier to receive an accurate and complete statement from the supplier of any such express warranties and other rights and any disclaimers or limitations of them or of remedies. See Alabama Code 7-2A-103
  • following: means next after. See Alabama Code 1-1-1
  • Goods: means all things that are movable at the time of identification to the lease contract, or are fixtures (Section 7-2A-309), but the term does not include money, documents, instruments, accounts, chattel paper, general intangibles, or minerals or the like, including oil and gas, before extraction. See Alabama Code 7-2A-103
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Lease: means a transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease. See Alabama Code 7-2A-103
  • Lease agreement: means the bargain, with respect to the lease, of the lessor and the lessee in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance as provided in this article. See Alabama Code 7-2A-103
  • Lease contract: means the total legal obligation that results from the lease agreement as affected by this article and any other applicable rules of law. See Alabama Code 7-2A-103
  • Lessee: means a person who acquires the right to possession and use of goods under a lease. See Alabama Code 7-2A-103
  • Lessor: means a person who transfers the right to possession and use of goods under a lease. See Alabama Code 7-2A-103
  • Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • person: includes a corporation as well as a natural person. See Alabama Code 1-1-1
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • Supplier: means a person from whom a lessor buys or leases goods to be leased under a finance lease. See Alabama Code 7-2A-103
  • writing: includes typewriting and printing on paper. See Alabama Code 1-1-1
(2) A lessee’s acceptance of goods precludes rejection of the goods accepted. In the case of a finance lease, other than a consumer lease in which the supplier assisted in the preparation of the lease contract or participated in negotiating the terms of the lease contract with the lessor, 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) within a reasonable time after the lessee receives notice of litigation for infringement or the like (Section obligation against infringement” class=”unlinked-ref” datatype=”S” sessionyear=”2020″ statecd=”AL” title=”7″>7-2A-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 (Section 7-2A-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 (Section 7-2A-211).
(6) Subsection (3) shall not apply to a consumer lease.
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