South Dakota Codified Laws 57A-2A-518. Cover–Substitute goods
(1) After default by a lessor under the lease contract (§ 57A-2A-508(1)), 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 (§ 57A-2A-504) or otherwise determined by agreement of the parties (§§ 57A-1-302 and 57A-2A-503), if a lessee’s cover is by lease agreement substantially similar to the original lease agreement and the lease agreement is made in good faith and in a commercially reasonable manner, the lessee may recover from the lessor as damages (a) the present value, as of the date of the commencement of the new lease agreement, of the difference between the total rent for the lease term of the new lease agreement and the total rent for the then remaining lease term of the original lease agreement and (b) any incidental or consequential damages less expenses saved in consequence of the lessor’s default.
Terms Used In South Dakota Codified Laws 57A-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 (§. See South Dakota Codified Laws 57A-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 South Dakota Codified Laws 57A-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 chapter. See South Dakota Codified Laws 57A-2A-103
- Lessee: means a person who acquires the right to possession and use of goods under a lease. See South Dakota Codified Laws 57A-2A-103
- Lessor: means a person who transfers the right to possession and use of goods under a lease. See South Dakota Codified Laws 57A-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 South Dakota Codified Laws 57A-2A-103
- Purchase: includes taking by sale, lease, mortgage, security interest, pledge, gift or any other voluntary transaction creating an interest in goods. See South Dakota Codified Laws 57A-2A-103
(3) If the lessee’s cover is by lease agreement that qualifies for treatment under subsection (2) of this section, the lessee may elect to proceed under subsection (2) of this section or § 57A-2A-519. 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 under § 57A-2A-519 as if the lessee had elected not to cover.
Source: SL 1989, ch 419, § 1; SL 1990, ch 390, § 20; SL 2008, ch 259, § 31.