Minnesota Statutes 336.2A-220 – Effect of Default On Risk of Loss
(1) Where risk of loss is to pass to the lessee and the time of passage is not stated:
Terms Used In Minnesota Statutes 336.2A-220
- Contract: A legal written agreement that becomes binding when signed.
- Finance lease: means a lease in which
(1) the lessor does not select, manufacture, or supply the goods,
(2) the lessor acquires the goods or the right to possession and use of the goods in connection with the lease, and
(3) either
(i) the lessee receives a copy of the contract evidencing the lessor's purchase of the goods or a disclaimer statement on or before signing the lease contract, or
(ii) the lessee's approval of the contract evidencing the lessor's purchase of the goods or a disclaimer statement is a condition to effectiveness of the lease contract. See Minnesota Statutes 336.2A-103
- Goods: means all things that are movable at the time of identification to the lease contract, or are fixtures (section 336. See Minnesota Statutes 336.2A-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 Minnesota Statutes 336.2A-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 Minnesota Statutes 336.2A-103
- Lessee: means a person who acquires the right to possession and use of goods under a lease. See Minnesota Statutes 336.2A-103
- Lessor: means a person who transfers the right to possession and use of goods under a lease. See Minnesota Statutes 336.2A-103
- Supplier: means a person from whom a lessor buys or leases goods to be leased under a finance lease. See Minnesota Statutes 336.2A-103
(a) If a tender or delivery of goods so fails to conform to the lease contract as to give a right of rejection, the risk of their loss remains with the lessor, or, in the case of a finance lease, the supplier, until cure or acceptance.
(b) If the lessee rightfully revokes acceptance, the lessee, to the extent of any deficiency in the lessee’s effective insurance coverage, may treat the risk of loss as having remained with the lessor from the beginning.
(2) Whether or not risk of loss is to pass to the lessee, if the lessee as to conforming goods already identified to a lease contract repudiates or is otherwise in default under the lease contract, the lessor, or, in the case of a finance lease, the supplier, to the extent of any deficiency in the lessor’s or supplier’s effective insurance coverage may treat the risk of loss as resting on the lessee for a commercially reasonable time.