(810 ILCS 5/Art. 2A Pt. 5 heading) PART 5.
DEFAULT
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(810 ILCS 5/Art. 2A Pt. 5 Sub. A heading) A.
In General
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(810 ILCS 5/2A-501) (from Ch. 26, par. 2A-501)
Sec. 2A-501. Default; procedure.
(1) Whether the lessor or the lessee is in default under a
lease contract is determined by the lease agreement and this
Article.
(2) If the lessor or the lessee is in default under the
lease contract, the party seeking enforcement has rights and
remedies as provided in this Article and, except as limited by
this Article, as provided in the lease agreement.
(3) If the lessor or the lessee is in default under the
lease contract, the party seeking enforcement may reduce the
party's claim to judgment, or otherwise enforce the lease
contract by self-help or any available judicial procedure or
nonjudicial procedure, including administrative proceeding,
arbitration, or the like, in accordance with this Article.
(4) Except as otherwise provided in Section 1-305(a)
or this Article or
the lease agreement, the rights and remedies referred to in subsections (2)
and (3) are cumulative.
(5) If the lease agreement covers both real property and
goods, the party seeking enforcement may proceed under this
Part as to the goods, or under other applicable law as to both
the real property and the goods in accordance with that party's
rights and remedies in respect of the real property, in which
case this Part does not apply.
(Source: P.A. 95-895, eff. 1-1-09.)
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(810 ILCS 5/2A-502) (from Ch. 26, par. 2A-502)
Sec. 2A-502.
Notice after default.
Except as otherwise provided in this Article or the lease
agreement, the lessor or lessee in default under the lease
contract is not entitled to notice of default or notice of
enforcement from the other party to the lease agreement.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-503) (from Ch. 26, par. 2A-503)
Sec. 2A-503.
Modification or impairment of rights and
remedies.
(1) Except as otherwise provided in this Article, the
lease agreement may include rights and remedies for default in
addition to or in substitution for those provided in this Article
and may limit or alter the measure of damages recoverable under
this Article.
(2) Resort to a remedy provided under this Article or in
the lease agreement is optional unless the remedy is expressly
agreed to be exclusive. If circumstances cause an exclusive or
limited remedy to fail of its essential purpose, or provision for
an exclusive remedy is unconscionable, remedy may be had as
provided in this Article.
(3) Consequential damages may be liquidated under
Section 2A-504, or may otherwise be limited, altered, or
excluded unless the limitation, alteration, or exclusion is
unconscionable. Limitation, alteration, or exclusion of consequential
damages for injury to the person in the case of consumer goods is prima
facie unconscionable but limitation, alteration, or exclusion of damages
where the loss is commercial is not prima facie unconscionable.
(4) Rights and remedies on default by the lessor or the
lessee with respect to any obligation or promise collateral or
ancillary to the lease contract are not impaired by this Article.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-504) (from Ch. 26, par. 2A-504)
Sec. 2A-504.
Liquidation of damages.
(1) Damages payable by either party for default, or any
other act or omission, including indemnity for loss or diminution
of anticipated tax benefits or loss or damage to lessor's residual
interest, may be liquidated in the lease agreement but only at an
amount or by a formula that is reasonable in light of the then
anticipated harm caused by the default or other act or omission.
(2) If the lease agreement provides for liquidation of
damages, and such provision does not comply with
subsection (1), or such provision is an exclusive or limited
remedy that circumstances cause to fail of its essential purpose,
remedy may be had as provided in this Article.
(3) If the lessor justifiably withholds or stops delivery of
goods because of the lessee's default or insolvency
(Section 2A-525 or 2A-526), the lessee is entitled to restitution
of any amount by which the sum of his or her payments
exceeds:
(a) the amount to which the lessor is entitled by | ||
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(b) in the absence of those terms, 20% of the then | ||
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(4) A lessee's right to restitution under subsection (3) is
subject to offset to the extent the lessor establishes:
(a) a right to recover damages under the provisions | ||
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(b) the amount or value of any benefits received by | ||
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(Source: P.A. 87-493.)
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(810 ILCS 5/2A-505) (from Ch. 26, par. 2A-505)
Sec. 2A-505.
Cancellation and termination and effect
of cancellation, termination, rescission, or fraud
on rights and remedies.
(1) On cancellation of the lease contract, all obligations
that are still executory on both sides are discharged, but any
right based on prior default or performance survives, and the
cancelling party also retains any remedy for default of the whole
lease contract or any unperformed balance.
(2) On termination of the lease contract, all obligations
that are still executory on both sides are discharged but any
right based on prior default or performance survives.
(3) Unless the contrary intention clearly appears,
expressions of "cancellation", "rescission", or the like of the
lease contract may not be construed as a renunciation or
discharge of any claim in damages for an antecedent default.
(4) Rights and remedies for material misrepresentation or
fraud include all rights and remedies available under this Article
for default.
(5) Neither rescission nor a claim for rescission of the
lease contract nor rejection or return of the goods may bar or
be deemed inconsistent with a claim for damages or other right
or remedy.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-506) (from Ch. 26, par. 2A-506)
Sec. 2A-506.
Statute of limitations.
(1) An action for default under a lease contract,
including breach of warranty or indemnity, must be commenced
within 4 years after the cause of action accrued. By the
original lease contract the parties may reduce the period of
limitation to not less than one year.
(2) A cause of action for default accrues when the act or
omission on which the default or breach of warranty is based is
or should have been discovered by the aggrieved party, or when
the default occurs, whichever is later. A cause of action for
indemnity accrues when the act or omission on which the claim
for indemnity is based is or should have been discovered by the
indemnified party, whichever is later.
(3) If an action commenced within the time limited by
subsection (1) is so terminated as to leave available a remedy by
another action for the same default or breach of warranty or
indemnity, the other action may be commenced after the expiration
of the time limited and within 6 months after the termination of
the first action unless the termination resulted from voluntary
discontinuance or from dismissal for failure or neglect to
prosecute.
(4) This Section does not alter the law on tolling of the
statute of limitations nor does it apply to causes of action that
have accrued before this Article becomes effective.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-507) (from Ch. 26, par. 2A-507)
Sec. 2A-507.
Proof of market rent; time and place.
(1) Damages based on market rent (Section 2A-519 or
2A-528) are determined according to the rent for the use of the
goods concerned for a lease term identical to the remaining lease
term of the original lease agreement and prevailing at the times specified
in Sections 2A-519 and 2A-528.
(2) If evidence of rent for the use of the goods
concerned for a lease term identical to the remaining lease term
of the original lease agreement and prevailing at the times or
places described in this Article is not readily available, the rent
prevailing within any reasonable time before or after the time
described or at any other place or for a different lease term
which in commercial judgment or under usage of trade would
serve as a reasonable substitute for the one described may be
used, making any proper allowance for the difference, including
the cost of transporting the goods to or from the other place.
(3) Evidence of a relevant rent prevailing at a time or
place or for a lease term other than the one described in this
Article offered by one party is not admissible unless and until
he or she has given the other party notice the court finds
sufficient to prevent unfair surprise.
(4) If the prevailing rent or value of any goods regularly
leased in any established market is in issue, reports in official
publications or trade journals or in newspapers or periodicals of
general circulation published as the reports of that market are
admissible in evidence. The circumstances of the preparation of
the report may be shown to affect its weight but not its
admissibility.
(Source: P.A. 87-493.)
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(810 ILCS 5/Art. 2A Pt. 5 Sub. B heading) B.
Default by Lessor
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(810 ILCS 5/2A-508) (from Ch. 26, par. 2A-508)
Sec. 2A-508.
Lessee's remedies.
(1) If a lessor fails to deliver the goods in conformity to
the lease contract (Section 2A-509) or repudiates the lease
contract (Section 2A-402), or a lessee rightfully rejects the
goods (Section 2A-509) or justifiably revokes acceptance of the
goods (Section 2A-517), then with respect to any goods
involved, and with respect to all of the goods if under an
installment lease contract the value of the whole lease contract is
substantially impaired (Section 2A-510), the lessor is in default
under the lease contract and the lessee may:
(a) cancel the lease contract (Section 2A-505(1));
(b) recover so much of the rent and security as has | ||
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(c) cover and recover damages as to all goods | ||
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(d) exercise any other rights or pursue any other | ||
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(2) If a lessor fails to deliver the goods in conformity to
the lease contract or repudiates the lease contract, the lessee may
also:
(a) if the goods have been identified, recover them | ||
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(b) in a proper case, obtain specific performance or | ||
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(3) If a lessor is otherwise in default under a lease
contract, the lessee may exercise the rights and pursue the remedies
provided in the lease contract, which may include a right to cancel the
lease, and in Section 2A-519(3).
(4) If a lessor has breached a warranty, whether express
or implied, the lessee may recover damages (Section 2A-519(4)).
(5) On rightful rejection or justifiable revocation of
acceptance, a lessee has a security interest in goods in the
lessee's possession or control for any rent and security that has
been paid and any expenses reasonably incurred in their
inspection, receipt, transportation, and care and custody and
may hold those goods and dispose of them in good faith and in a
commercially reasonable manner, subject to
Section 2A-527(5).
(6) Subject to the provisions of Section 2A-407, a lessee,
on notifying the lessor of the lessee's intention to do so, may
deduct all or any part of the damages resulting from any default
under the lease contract from any part of the rent still due
under the same lease contract.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-509) (from Ch. 26, par. 2A-509)
Sec. 2A-509.
Lessee's rights on improper delivery;
rightful rejection.
(1) Subject to the provisions of Section 2A-510 on default
in installment lease contracts, if the goods or the tender or
delivery fail in any respect to conform to the lease contract, the
lessee may reject or accept the goods or accept any commercial
unit or units and reject the rest of the goods.
(2) Rejection of goods is ineffective unless it is within a
reasonable time after tender or delivery of the goods and the
lessee seasonably notifies the lessor.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-510) (from Ch. 26, par. 2A-510)
Sec. 2A-510.
Installment lease contracts; rejection
and default.
(1) Under an installment lease contract, a lessee may
reject any delivery that is nonconforming if the nonconformity
substantially impairs the value of that delivery and cannot be
cured or the nonconformity is a defect in the required
documents; but if the nonconformity does not fall within
subsection (2) and the lessor or the supplier gives adequate
assurance of its cure, the lessee must accept that delivery.
(2) Whenever nonconformity or default with respect to one
or more deliveries substantially impairs the value of the
installment lease contract as a whole there is a default with
respect to the whole. But, the aggrieved party reinstates the
installment lease contract as a whole if the aggrieved party
accepts a nonconforming delivery without seasonably notifying of
cancellation or brings an action with respect only to past
deliveries or demands performance as to future deliveries.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-511) (from Ch. 26, par. 2A-511)
Sec. 2A-511.
Merchant lessee's duties as to rightfully
rejected goods.
(1) Subject to any security interest of a lessee
(Section 2A-508(5)), if a lessor or a supplier has no agent or
place of business at the market of rejection, a merchant lessee,
after rejection of goods in his or her possession or control,
shall follow any reasonable instructions received from the lessor
or the supplier with respect to the goods. In the absence of
those instructions, a merchant lessee shall make reasonable
efforts to sell, lease, or otherwise dispose of the goods for the
lessor's account if they threaten to decline in value speedily.
Instructions are not reasonable if on demand indemnity for
expenses is not forthcoming.
(2) If a merchant lessee (subsection (1)) or any other
lessee (Section 2A-512) disposes of goods, he or she 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% of the gross proceeds.
(3) In complying with this Section or Section 2A-512, 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.
(4) A purchaser who purchases in good faith from a
lessee pursuant to this Section or Section 2A-512 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 Article.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-512) (from Ch. 26, par. 2A-512)
Sec. 2A-512.
Lessee's duties as to rightfully rejected
goods.
(1) 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(5)):
(a) the lessee, after rejection of goods in the | ||
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(b) if the lessor or the supplier gives no | ||
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(c) the lessee has no further obligations with regard | ||
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(2) Action by the lessee pursuant to subsection (1) is not
acceptance or conversion.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-513) (from Ch. 26, par. 2A-513)
Sec. 2A-513.
Cure by lessor of improper tender or
delivery; replacement.
(1) If any tender or delivery by the lessor or the
supplier is rejected because nonconforming and the time for
performance has not yet expired, the lessor or the supplier may
seasonably notify the lessee of the lessor's or the supplier's
intention to cure and may then make a conforming delivery
within the time provided in the lease contract.
(2) If the lessee rejects a nonconforming tender that the
lessor or the supplier had reasonable grounds to believe would
be acceptable with or without money allowance, the lessor or the
supplier may have a further reasonable time to substitute a
conforming tender if he or she seasonably notifies the lessee.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-514) (from Ch. 26, par. 2A-514)
Sec. 2A-514. Waiver of lessee's objections.
(1) In rejecting goods, a lessee's failure to state a
particular defect that is ascertainable by reasonable inspection
precludes the lessee from relying on the defect to justify
rejection or to establish default:
(a) if, stated seasonably, the lessor or the supplier | ||
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(b) between merchants if the lessor or the supplier | ||
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(2) A lessee's failure to reserve rights when paying rent
or other consideration against documents precludes recovery of
the payment for defects apparent in
the documents.
(Source: P.A. 95-895, eff. 1-1-09.)
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(810 ILCS 5/2A-515) (from Ch. 26, par. 2A-515)
Sec. 2A-515.
Acceptance of goods.
(1) Acceptance of goods occurs after the lessee has had a
reasonable opportunity to inspect the goods and
(a) the lessee signifies or acts with respect to the | ||
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(b) the lessee fails to make an effective rejection | ||
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(2) Acceptance of a part of any commercial unit is
acceptance of that entire unit.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-516) (from Ch. 26, par. 2A-516)
Sec. 2A-516.
Effect of acceptance of goods; notice of
default; burden of establishing default after
acceptance; notice of claim or litigation to person
answerable over.
(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.
(2) A lessee's acceptance of goods precludes rejection of
the goods accepted. In the case of a finance lease, 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 | ||
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(b) except in the case of a consumer lease, within a | ||
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(c) the burden is on the lessee to establish any | ||
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(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, | ||
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(b) The lessor or the supplier may demand in writing | ||
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(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 2A-211).
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-517) (from Ch. 26, par. 2A-517)
Sec. 2A-517.
Revocation of acceptance of goods.
(1) A lessee may revoke acceptance of a lot or commercial
unit whose nonconformity substantially impairs its value to the
lessee if the lessee has accepted it:
(a) except in the case of a finance lease, on the | ||
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(b) without discovery of the nonconformity if the | ||
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(2) Except in the case of a finance lease that is not a consumer lease,
a lessee may revoke acceptance of a lot or commercial unit if the lessor
defaults under the lease contract and the default substantially impairs the
value of that lot or commercial unit to the lessee.
(3) If the lease agreement so provides, the lessee may revoke acceptance
of a lot or commercial unit because of other defaults by the lessor.
(4) Revocation of acceptance must occur within a
reasonable time after the lessee discovers or should have
discovered the ground for it and before any substantial change
in condition of the goods which is not caused by the
nonconformity. Revocation is not effective until the lessee
notifies the lessor.
(5) A lessee who so revokes has the same rights and
duties with regard to the goods involved as if the lessee had
rejected them.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-518) (from Ch. 26, par. 2A-518)
Sec. 2A-518. Cover; substitute goods.
(1) After a default by a lessor under the lease contract
of the type described in Section 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 (Section 2A-504) or otherwise determined pursuant to
agreement of the parties (Sections 1-302
and 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), or is by purchase or
otherwise, the lessee may recover from the lessor as if the lessee had
elected not to cover and Section 2A-519 governs.
(Source: P.A. 95-895, eff. 1-1-09.)
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(810 ILCS 5/2A-519) (from Ch. 26, par. 2A-519)
Sec. 2A-519. Lessee's damages for nondelivery, repudiation, default, and
breach of warranty in regard to accepted goods.
(1) Except as otherwise provided with respect to damages liquidated in the
lease agreement (Section 2A-504) or otherwise determined pursuant to
agreement of the parties (Sections 1-302
and 2A-503), if a lessee elects
not to cover or a lessee elects to cover and the cover is by lease
agreement that for any reason does not qualify for treatment under Section
2A-518(2), or is by purchase or otherwise, the measure of damages for
nondelivery or repudiation by the lessor or for rejection or revocation of
acceptance by the lessee is the present value, as of the date of the
default, of the then market rent minus the present value as of the same
date of the original rent, computed for the remaining lease term of the
original lease agreement, together with incidental and consequential
damages, less expenses saved in consequence of the lessor's default.
(2) Market rent is to be determined as of the place for
tender or, in cases of rejection after arrival or revocation of
acceptance, as of the place of arrival.
(3) Except as otherwise agreed, if the lessee has accepted goods and
given notification (Section 2A-516(3)), the measure of damages for
nonconforming tender or delivery or other default by a lessor is the loss
resulting in the ordinary course of events from the lessor's
default as determined in any manner that is reasonable together
with incidental and consequential damages, less expenses saved
in consequence of the lessor's default.
(4) Except as otherwise agreed, the measure of damages for breach of
warranty is the present value at the time and place of acceptance of the
difference between the value of the use of the goods accepted and the value
if they had been as warranted for the lease term, unless special
circumstances show proximate damages of a different amount, together with
incidental and consequential damages, less expenses saved in consequence of
the lessor's default or breach of warranty.
(Source: P.A. 95-895, eff. 1-1-09.)
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(810 ILCS 5/2A-520) (from Ch. 26, par. 2A-520)
Sec. 2A-520.
Lessee's incidental and consequential
damages.
(1) Incidental damages resulting from a lessor's default
include expenses reasonably incurred in inspection, receipt,
transportation, and care and custody of goods rightfully rejected
or goods the acceptance of which is justifiably revoked, any
commercially reasonable charges, expenses, or commissions in
connection with effecting cover, and any other reasonable
expense incident to the default.
(2) Consequential damages resulting from a lessor's
default include:
(a) any loss resulting from general or particular | ||
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(b) injury to person or property proximately | ||
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(Source: P.A. 87-493.)
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(810 ILCS 5/2A-521) (from Ch. 26, par. 2A-521)
Sec. 2A-521.
Lessee's right to specific performance or
replevin.
(1) Specific performance may be decreed if the goods are
unique or in other proper circumstances.
(2) A decree for specific performance may include any
terms and conditions as to payment of the rent, damages, or
other relief that the court deems just.
(3) A lessee has a right of replevin, detinue,
sequestration, claim and delivery, or the like for goods
identified to the lease contract if after reasonable effort the
lessee is unable to effect cover for those goods or the
circumstances reasonably indicate that the effort will be
unavailing.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-522) (from Ch. 26, par. 2A-522)
Sec. 2A-522.
Lessee's right to goods on lessor's
insolvency.
(1) Subject to subsection (2) and even though the goods
have not been shipped, a lessee who has paid a part or all of
the rent and security for goods identified to a lease contract
(Section 2A-217) on making and keeping good a tender of any
unpaid portion of the rent and security due under the lease
contract may recover the goods identified from the lessor if the
lessor becomes insolvent within 10 days after receipt of the first
installment of rent and security.
(2) A lessee acquires the right to recover goods
identified to a lease contract only if they conform to the lease
contract.
(Source: P.A. 87-493.)
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(810 ILCS 5/Art. 2A Pt. 5 Sub. C heading) C.
Default by Lessee
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(810 ILCS 5/2A-523) (from Ch. 26, par. 2A-523)
Sec. 2A-523.
Lessor's remedies.
(1) If a lessee wrongfully rejects or revokes acceptance
of goods or fails to make a payment when due or repudiates with
respect to a part or the whole, then, with respect to any goods
involved, and with respect to all of the goods if under an
installment lease contract the value of the whole lease contract is
substantially impaired (Section 2A-510), the lessee is in default
under the lease contract and the lessor may:
(a) cancel the lease contract (Section 2A-505(1));
(b) proceed respecting goods not identified to the | ||
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(c) withhold delivery of the goods and take | ||
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(d) stop delivery of the goods by any bailee (Section | ||
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(e) dispose of the goods and recover damages (Section | ||
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(f) exercise any other rights or pursue any other | ||
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(2) If a lessor does not fully exercise a right or obtain a remedy to
which the lessor is entitled under subsection (1), the lessor may recover
the loss resulting in the ordinary course of events from the lessee's
default as determined in any reasonable manner, together with incidental
damages, less expenses saved in consequence of the lessee's default.
(3) If a lessee is otherwise in default under a lease
contract, the lessor may exercise the rights and pursue the remedies
provided in the lease contract, which may include a right to cancel the
lease. In addition, unless otherwise provided in the lease contract:
(a) if the default substantially impairs the value of | ||
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(b) if the default does not substantially impair the | ||
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(Source: P.A. 87-493.)
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(810 ILCS 5/2A-524) (from Ch. 26, par. 2A-524)
Sec. 2A-524.
Lessor's right to identify goods to lease
contract.
(1) A lessor aggrieved under Section 2A-523(1) may:
(a) identify to the lease contract conforming goods | ||
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(b) dispose of goods (Section 2A-527(1)) that | ||
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(2) If the goods are unfinished, in the exercise of
reasonable commercial judgment for the purposes of avoiding loss
and of effective realization, an aggrieved lessor or the supplier
may either complete manufacture and wholly identify the goods to
the lease contract or cease manufacture and lease, sell, or
otherwise dispose of the goods for scrap or salvage value or
proceed in any other reasonable manner.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-525) (from Ch. 26, par. 2A-525)
Sec. 2A-525.
Lessor's right to possession of goods.
(1) If a lessor discovers the lessee to be insolvent, the
lessor may refuse to deliver the goods.
(2) After a default by the lessee under the lease contract of the type
described in Section 2A-523(1) or 2A-523(3)(a) or, if agreed, after other
default by the lessee, the lessor has the right to take possession of the
goods. If the lease contract so provides, the lessor may require the
lessee to assemble the goods and make them available to the lessor at a
place to be designated by the lessor which is reasonably
convenient to both parties. Without removal, the lessor may
render unusable any goods employed in trade or business, and
may dispose of goods on the lessee's premises (Section 2A-527).
(3) The lessor may proceed under subsection (2) without
judicial process if it can be done without breach of the peace
or the lessor may proceed by action.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-526) (from Ch. 26, par. 2A-526)
Sec. 2A-526. Lessor's stoppage of delivery in transit
or otherwise.
(1) A lessor may stop delivery of goods in the possession
of a carrier or other bailee if the lessor discovers the lessee to
be insolvent and may stop delivery of carload, truckload,
planeload, or larger shipments of express or freight if the lessee
repudiates or fails to make a payment due before delivery,
whether for rent, security or otherwise under the lease
contract, or for any other reason the lessor has a right to
withhold or take possession of the goods.
(2) In pursuing its remedies under subsection (1), the
lessor may stop delivery until:
(a) receipt of the goods by the lessee;
(b) acknowledgment to the lessee by any bailee of the | ||
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(c) such an acknowledgment to the lessee by a carrier | ||
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(3)(a) To stop delivery, a lessor shall so notify as to
enable the bailee by reasonable diligence to prevent delivery of
the goods.
(b) After notification, the bailee shall hold and deliver
the goods according to the directions of the lessor, but the
lessor is liable to the bailee for any ensuing charges or
damages.
(c) A carrier who has issued a nonnegotiable bill of
lading is not obliged to obey a notification to stop received from
a person other than the consignor.
(Source: P.A. 95-895, eff. 1-1-09.)
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(810 ILCS 5/2A-527) (from Ch. 26, par. 2A-527)
Sec. 2A-527. Lessor's rights to dispose of goods.
(1) After a default by a lessee under the lease contract
of the type described in Section 2A-523(1) or 2A-523(3)(a) or after the
lessor refuses to deliver or takes possession of goods (Section 2A-525 or
2A-526), or, if agreed, after other default by a lessee, the lessor may
dispose of the goods concerned or the undelivered balance thereof by lease,
sale, or otherwise.
(2) Except as otherwise provided with respect to damages liquidated in
the lease agreement (Section 2A-504) or otherwise determined pursuant to
agreement of the parties (Sections 1-302
and 2A-503), if the disposition
is by 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 lessor may recover from the lessee as damages (i)
accrued and unpaid rent as of the date of the commencement of the term of
the new lease agreement, (ii) the present value, as of the same date, of
the total rent for the then remaining lease term of the original lease
agreement minus the present value, as of the same date, 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, and (iii) any incidental damages allowed under Section 2A-530,
less expenses saved in consequence of the lessee's default.
(3) If the lessor's disposition is by lease agreement that for
any reason does not qualify for treatment under subsection (2),
or is by sale or otherwise, the lessor may recover from the
lessee as if the lessor had elected not to dispose of the goods
and Section 2A-528 governs.
(4) A subsequent buyer or lessee who buys or leases
from the lessor in good faith for value as a result of a
disposition under this Section takes the goods free of the
original lease contract and any rights of the original lessee even
though the lessor fails to comply with one or more of the
requirements of this Article.
(5) The lessor is not accountable to the lessee for any
profit made on any disposition. A lessee who has rightfully
rejected or justifiably revoked acceptance shall account to the
lessor for any excess over the amount of the lessee's security
interest (Section 2A-508(5)).
(Source: P.A. 95-895, eff. 1-1-09.)
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(810 ILCS 5/2A-528) (from Ch. 26, par. 2A-528)
Sec. 2A-528. Lessor's damages for nonacceptance, failure to pay,
repudiation, or other default.
(1) Except as otherwise provided with respect to damages liquidated in
the lease agreement (Section 2A-504) or otherwise determined pursuant to
agreement of the parties (Sections 1-302
and 2A-503), if a lessor elects
to retain the goods or a lessor elects to dispose of the goods
and the disposition is by lease agreement that for any reason does
not qualify for treatment under Section 2A-527(2), or is by sale
or otherwise, the lessor may recover from the lessee as damages
for a default of the type described in Section 2A-523(1) or 2A-523(3)(a)
or, if agreed, for other default of the lessee, (i) accrued and
unpaid rent as of the date of default if the lessee has never taken
possession of the goods, or, if the lessee has taken possession of the
goods, as of the date the lessor repossesses the goods or an earlier date
on which the lessee makes a tender of the goods to the lessor, (ii) the
present value as of the date determined under clause (i) of the total rent
for the then remaining lease term of the original lease agreement minus the
present value as of the same date of the market rent at the place where the
goods are located computed for the same lease term, and (iii) any
incidental damages allowed under Section 2A-530, less expenses saved in
consequence of the lessee's default.
(2) If the measure of damages provided in subsection (1) is inadequate
to put a lessor in as good a position as performance would have, the
measure of damages is the present value of the profit, including reasonable
overhead, the lessor would have made from full performance by the lessee,
together with any incidental damages allowed under Section 2A-530, due
allowance for costs reasonably incurred and due credit for payments or
proceeds of disposition.
(Source: P.A. 95-895, eff. 1-1-09.)
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(810 ILCS 5/2A-529) (from Ch. 26, par. 2A-529)
Sec. 2A-529.
Lessor's action for the rent.
(1) After default by the lessee under the lease contract
of the type described in Section 2A-523(1) or 2A-523(3)(a) or, if
agreed, after other default by the lessee, if the lessor complies with
subsection (2), the lessor may recover from the lessee as damages:
(a) for goods accepted by the lessee and not | ||
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(b) for goods identified to the lease contract if the | ||
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(2) Except as provided in subsection (3), the lessor shall
hold for the lessee for the remaining lease term of the lease
agreement any goods that have been identified to the lease
contract and are in the lessor's control.
(3) The lessor may dispose of the goods at any time
before collection of the judgment for damages obtained pursuant
to subsection (1). If the disposition is before the end of the remaining
lease term of the lease agreement, the lessor's recovery against the lessee
for damages is governed by Section 2A-527 or 2A-528, and the lessor will
cause an appropriate credit to be provided against a judgment for damages
to the extent that the amount of the judgment exceeds the recovery
available pursuant to Section 2A-527 or 2A-528.
(4) Payment of the judgment for damages obtained
pursuant to subsection (1) entitles the lessee to the use and
possession of the goods not then disposed of for the remaining
lease term of and in accordance with the lease agreement.
(5) After a lessee has wrongfully rejected or revoked
acceptance of goods, has failed to pay rent then due, or has
repudiated (Section 2A-402), a lessor who is held not entitled to
rent under this Section must nevertheless be awarded damages
for nonacceptance under Sections 2A-527 and 2A-528.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-530) (from Ch. 26, par. 2A-530)
Sec. 2A-530.
Lessor's incidental damages.
Incidental damages to an aggrieved lessor include any
commercially reasonable charges, expenses, or commissions
incurred in stopping delivery, in the transportation, care and
custody of goods after the lessee's default, in connection with
return or disposition of the goods, or otherwise resulting from
the default.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-531) (from Ch. 26, par. 2A-531)
Sec. 2A-531.
Standing to sue third parties for injury
to goods.
(1) If a third party so deals with goods that have been
identified to a lease contract as to cause actionable injury to a
party to the lease contract (a) the lessor has a right of action
against the third party, and (b) the lessee also has a right of
action against the third party if the lessee:
(i) has a security interest in the goods;
(ii) has an insurable interest in the goods; or
(iii) bears the risk of loss under the lease contract | ||
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(2) If at the time of the injury the party plaintiff did not
bear the risk of loss as against the other party to the lease
contract and there is no arrangement between them for
disposition of the recovery, his or her suit or settlement,
subject to his or her own interest, is as a fiduciary for the
other party to the lease contract.
(3) Either party with the consent of the other may sue
for the benefit of whom it may concern.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-532) (from Ch. 26, par. 2A-532)
Sec. 2A-532.
Lessor's rights to residual interest.
In addition to any
other recovery permitted by this Article or other law, the lessor may
recover from the lessee an amount that will fully compensate the lessor for
any loss of or damage to the lessor's residual interest in the goods caused
by the default of the lessee.
(Source: P.A. 87-493.)
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