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84-2a-219. Risk of loss. (1) Except in the case of a finance lease, risk of loss is retained by the lessor and does not pass to the lessee. In the case of a finance lease, risk of loss passes to the lessee.

(2) Subject to the provisions of this article on the effect of default on risk of loss (K.S.A. 84-2a-220), if risk of loss is to pass to the lessee and the time of passage is not stated, the following rules apply:

(a) If the lease contract requires or authorizes the goods to be shipped by carrier,

(i) and it does not require delivery at a particular destination, the risk of loss passes to the lessee when the goods are duly delivered to the carrier, but

(ii) if it does require delivery at a particular destination and the goods are there duly tendered while in the possession of the carrier, the risk of loss passes to the lessee when the goods are there duly so tendered as to enable the lessee to take delivery.

(b) If the goods are held by a bailee to be delivered without being moved, the risk of loss passes to the lessee on acknowledgment by the bailee of the lessee's right to possession of the goods.

(c) In any case not within subsection (a) or (b), the risk of loss passes to the lessee on the lessee's receipt of the goods if the lessor, or, in the case of a finance lease, the supplier, is a merchant; otherwise, the risk passes to the lessee on tender of delivery.

History: L. 1991, ch. 295, ยง 28; February 1, 1992.

KANSAS COMMENT, 1996

1. This section and the following section state the rules of Article 2A for allocating the risk of loss of the goods subject to the lease contract. Subsection (1) states the general rule: the risk of loss ordinarily remains on the lessor, except for a finance lease, in which case risk of loss passes to the lessee. The exception concerning finance leases reflects the differing nature of a finance lease from an ordinary lease between two parties. See Evco Distrib., Inc. v. Commercial Credit Equip. Corp., 6 K.A.2d 205, 627 P.2d 374, rev. denied, 229 K. 669 (1981) (addressing risk of loss under supply contract as part of finance lease transaction).

2. Subsection (2) applies only when risk of loss is to pass to the lessee and the lease contract is silent on the timing. It does not apply in the ordinarily lease, in which risk of loss remains on the lessor. This subsection borrows from section 84-2-509(1), (2), (3), with changes only to make the provision applicable to leases

3. The rules stated in this section apply in the absence of agreement by the parties. Although the section omits subsection (4) of section 84-2-509 (the statutory analogue), which expressly provides for variation by agreement, it does so because that subsection was unnecessary. See Official Comments to this section. Section 84-1-102(3), which applies to Article 2A (see 84-2a-103(4)), broadly permits the parties to vary the terms of the Article by agreement. See also Official Comments to 84-2a-101.


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