KRS 355.2A-221: Casualty to identified goods.

If a lease contract requires goods identified when the lease contract is made, and the

goods suffer casualty without fault of the lessee, the lessor or the supplier before delivery,

or the goods suffer casualty before risk of loss passes to the lessee purs uant to the lease

agreement or KRS 355.2A-219, then:

(1) If the loss is total, the lease contract is avoided; and

(2) If the loss is partial or the goods have so deteriorated as to no longer conform to the

lease contract, the lessee may nevertheless demand inspection and at his option

either treat the lease contract as avoided or, except in a finance lease that is not a

consumer lease, accept the goods with due allowance from the rent payable for the

balance of the lease term for the deterioration or the de ficiency in quantity but

without further right against the lessor.