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84-2a-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 canceling 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.

History: L. 1991, ch. 295, ยง 53; February 1, 1992.

KANSAS COMMENT, 1996

1. Subsections (1) and (2) distinguish between the effect of "cancellation" and the effect of "termination." The terms are defined in sections 84-2a-103(1)(b) and (z). Termination discharges any executory duties of either party, although both parties retain any right based on prior default or performance of the lease. The effect of cancellation is the same as termination, except that a canceling party also retains any remedy for default of the unperformed part of the lease contract or the lease contract as a whole. These subsections, together with the definitions, state the substance of sections 84-2-106(3) and (4), the statutory analogues.

2. Subsection (3), which is based on section 84-2-720, makes clear that merely using the words "cancellation," "rescission," or the like does not discharge a claim for damages for default. The intent to renounce a claim must "clearly" appear. Subsection (5) adds that a damages remedy is not foreclosed by actual rescission of the lease contract, a claim for rescission, or rejection or return of the goods.

3. Subsection (4) provides that at a minimum a party injured by misrepresentations or fraud has the same remedies as are available under Article 2A for default. This subsection is derived from section 84-2-721, with changes only to make the provision applicable to leases. For further discussion, see 1996 Kansas Comments to 84-2-721.


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