KRS 355.2A-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 beca use 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 impai r 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 discovers or should have discovered

any default, the lessee shall notify the lessor and t he supplier, if any, or be

barred from any remedy against the party not notified;

(b) Except in the case of a consumer lease, within a reasonable time after the

lessee receives notice of litigation for infringement or the like (KRS 355.2A -

211) the lessee s hall notify the lessor or be barred from any remedy over for

liability established by the litigation; and

(c) The burden is on the lessee to establish any default.

(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, or both, written notice of the

litigation. If the notice states that the person notified may come in and defend

and that if the person notified does not d o so, that person will be bound in any

action against that person by the lessee by any determination of fact common

to the two (2) litigations, then unless the person notified after seasonable

receipt of the notice does come in and defend that person is so bound.

(b) The lessor or the supplier may demand in writing that the lessee turn over

control of the litigation including settlement if the claim is one for

infringement or the like (KRS 355.2A-211) or else be barred from any remedy

over. If the demand st ates that the lessor or the supplier agrees to bear all

expense and to satisfy any adverse judgment, then unless the lessee after

seasonable receipt of the demand does turn over control the lessee is so

barred.

(5) Subsections (3) and (4) apply to any obli gation of a lessee to hold the lessor or the

supplier harmless against infringement or the like (KRS 355.2A-211).