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84-2a-524. Lessor's right to identify goods to lease contract. (1) After default by the lessee under the lease contract of the type described in subsection (1) or (3)(a) of K.S.A. 84-2a-523 or, if agreed, after other default by the lessee, the lessor may:

(a) Identify to the lease contract conforming goods not already identified if at the time the lessor learned of the default they were in the lessor's or the supplier's possession or control; and

(b) dispose of goods (K.S.A. 84-2a-527(1)) that demonstrably have been intended for the particular lease contract even though those goods are unfinished.

(2) If the goods are unfinished, in the exercise of reasonable commercial judgment for the purposes of avoiding loss and of effective realization, an aggrieved lessor or the supplier may either complete manufacture and wholly identify the goods to the lease contract or cease manufacture and lease, sell, or otherwise dispose of the goods for scrap or salvage value or proceed in any other reasonable manner.

History: L. 1991, ch. 295, § 72; February 1, 1992.


This section defines the lessor's rights with respect to goods not identified to the lease contract or goods unfinished at the time of the lessee's default. It is analogous to the seller's right to identify goods to a sales contract under section 84-2-704, with changes only to make the provision applicable to leases. For further discussion, see 1996 Kansas Comments to 84-2-704. Note that this section is available in the event of statutory default or other default (if material) or if the lease provides this remedy to the lessor. The Official Comments to this section give examples of various ways the lease may make this remedy available to the lessor—by referring to the remedies of identification and disposition, referring to this section number, or providing the lessor "all rights and remedies provided by Article 2A for default by the lessee."

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