N.Y. Uniform Commercial Code Law § 2-a-527: Lessor's Rights to Dispose of Goods

Section 2-A-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 2-A-523(1) or 2-A-523(3)(a) or after the lessor

refuses to deliver or takes possession of goods (Section 2-A-525 or

2-A-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 2-A-504) or otherwise determined pursuant

to agreement of the parties (Sections 1--302 and 2-A-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 (a) accrued and unpaid rent as of the date of the

commencement of the term of the new lease agreement, (b) 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 lease term of the original lease agreement, and (c) any

incidental damages allowed under Section 2-A-530, less expenses saved in

consequence of the lessee's default.

(3) If the lessor's disposition is by lease agreement that qualifies

for treatment under subsection (2), the lessor may elect to proceed

under subsection (2) or Section 2-A-528. 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.

(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 2-A-508(5)).