North Carolina General Statutes 25-2A-518. Cover; substitute goods
Terms Used In North Carolina General Statutes 25-2A-518
- Contract: A legal written agreement that becomes binding when signed.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Goods: means all things that are movable at the time of identification to the lease contract, or are fixtures (N. See North Carolina General Statutes 25-2A-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 North Carolina General Statutes 25-2A-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 North Carolina General Statutes 25-2A-103
- Lessee: means a person who acquires the right to possession and use of goods under a lease. See North Carolina General Statutes 25-2A-103
- Lessor: means a person who transfers the right to possession and use of goods under a lease. See North Carolina General Statutes 25-2A-103
- Present value: means the amount as of a date certain of one or more sums payable in the future, discounted to the date certain. See North Carolina General Statutes 25-2A-103
- Purchase: includes taking by sale, lease, mortgage, security interest, pledge, gift, or any other voluntary transaction creating an interest in goods. See North Carolina General Statutes 25-2A-103
(1) After a default by a lessor under the lease contract of the type described in N.C. Gen. Stat. § 25-2A-508(1), or, if agreed, after other default by the lessor, the lessee may cover by making any purchase or lease of or contract to purchase or lease goods in substitution for those due from the lessor.
(2) Except as otherwise provided with respect to damages liquidated in the lease agreement (N.C. Gen. Stat. § 25-2A-504) or otherwise determined pursuant to agreement of the parties (N.C. Gen. Stat. § 25-1-302 and N.C. Gen. Stat. § 25-2A-503), if a lessee’s cover is by a lease agreement substantially similar to the original lease agreement and the new lease agreement is made in good faith and in a commercially reasonable manner, the lessee may recover from the lessor as damages (i) the present value, as of the date of the commencement of the term of the new lease agreement, of the rent under the new lease agreement applicable to that period of the new lease term which is comparable to the then remaining term of the original lease agreement minus the present value as of the same date of the total rent for the then remaining lease term of the original lease agreement, and (ii) any incidental or consequential damages, less expenses saved in consequence of the lessor’s default.
(3) If a lessee’s cover is by lease agreement that for any reason does not qualify for treatment under subsection (2) of this section, or is by purchase or otherwise, the lessee may recover from the lessor as if the lessee had elected not to cover and N.C. Gen. Stat. § 25-2A-519 governs. (1993, c. 463, s. 1; 2006-112, s. 8.)