KRS 355.2A-511: Merchant lessee's duties as to rightfully rejected goods.

(1) Subject to any security interest of a lessee (subsection (5) of KRS 355.2A -508), 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 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 (KRS 355.2A-512) disposes

of goods, he is entitled to reim bursement 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 non e, to a reasonable sum not exceeding ten percent

(10%) of the gross proceeds.

(3) In complying with this section or KRS 355.2A -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

KRS 355.2A-512 takes the goods free of any rights of the lessor and the supplier

even though the lessee fails to comply with one (1) or more of the re quirements of

this article.