84-2a-501. Default; procedure. (1) Whether the lessor or the lessee is in default under a lease contract is determined by the lease agreement and this article.
(2) If the lessor or the lessee is in default under the lease contract, the party seeking enforcement has rights and remedies as provided in this article and, except as limited by this article, as provided in the lease agreement.
(3) If the lessor or the lessee is in default under the lease contract, the party seeking enforcement may reduce the party's claim to judgment, or otherwise enforce the lease contract by self-help or any available judicial procedure or nonjudicial procedure, including administrative proceeding, arbitration, or the like, in accordance with this article.
(4) Except as otherwise provided in K.S.A. 2024 Supp. 84-1-305(a), and amendments thereto or this article or the lease agreement, the rights and remedies referred to in subsections (2) and (3) are cumulative.
(5) If the lease agreement covers both real property and goods, the party seeking enforcement may proceed under K.S.A. 84-2a-501 through 84-2a-532, and amendments thereto, as to the goods, or under other applicable law as to both the real property and the goods in accordance with that party's rights and remedies in respect to the real property, in which case K.S.A. 84-2a-501 through 84-2a-532, and amendments thereto, do not apply.
History: L. 1991, ch. 295, § 49; L. 2007, ch. 89, § 36; July 1, 2008.
KANSAS COMMENT, 1996
1. Article 2A speaks not of breach of a lease contract, but of default under a lease contract, drawing from Article 9 on secured transactions. This section states the grounds for and consequences of default. Subsection (1) reflects two significant changes from Article 9. First, either party to the lease agreement may default, reflecting the bilateral nature of a lease, in contrast to the largely unilateral nature of a secured transaction. Second, whether a party is in default is determined not just by the lease agreement, but also by the provisions of Article 2A. In other words, Article 2A contains statutory grounds for default. The statutory grounds for default of the lessor are set out in section 84-2a-508(1); the statutory grounds for default by the lessee are set out in section 84-2a-523(1). See 1996 Kansas Comments to those sections. The Uniform Consumer Credit Code, as enacted in Kansas, restricts the permissible contractual grounds for default by a consumer in a consumer lease to failure to make payments under the lease and to significant impairment of the prospect for payment, performance, or realization of collateral. See K.S.A. 16a-5-109.
2. Subsections (2) and (3) are derived from section 84-9-501(1). Subsection (2) makes clear that the non-defaulting party has the rights and remedies set out in Article 2A and in the lease agreement as limited by Article 2A. Subsection (3) lists three ways that a non-defaulting party may enforce its rights: by reducing its claim to judgment and collecting on the judgment; by self-help; and by any available judicial or non-judicial procedure.
3. Subsection (4) states that the remedies available under Article 2A are cumulative, except as otherwise provided in the lease, this Article, or section 84-1-106(1), which provides that "(t)he remedies provided by this act shall be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed." Official Comment 4 to this section explains that a party may not cumulate or select among remedies "to the extent that the cumulation or selection would put the aggrieved party in a better position than it would have been in had there been full performance by the other party." Article 2A implements this policy by making market rent damages expressly unavailable to a buyer that has covered properly (84-2a-519(1)) and a seller that has leased the goods properly to another party (84-2a-528(1)). See 1996 Kansas Comment 1 to 84-2a-519 & 1996 Kansas Comment 1 to 84-2a-528.
4. Under subsection (5), if a lease agreement covers both goods and real property (such as the lease of a furnished apartment), the non-defaulting party has a choice. It may either rely on Article 2A as to the goods and other applicable law as to the real property, or it may rely on the other applicable law as to both the goods and the real property. Official Comment 5 to the statutory analogue, section 84-9-501(4), indicates that this choice is available in the "interests of simplicity and speed." If the non-defaulting party chooses to proceed under other applicable law as to the whole transaction, Article 2A does not apply.
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