Oregon Statute | Act | Code |Title 08 Commercial Transactions| US Code - US Statute

This chapter may be cited as the Uniform
Commercial Code–Leases. [1989 c.676 §1; 1995 c.79 §21] This chapter applies to any transaction, regardless
of form, that creates a lease. [1989 c.676 §2] (1) As used in this
chapter, unless the context otherwise requires:

(a) "Buyer in ordinary course of business" means a person who in
good faith and without knowledge that the sale to the person is in
violation of the ownership rights or security interest or leasehold
interest of a third party in the goods buys in ordinary course from a
person in the business of selling goods of that kind but does not include
a pawnbroker. "Buying" may be for cash or by exchange of other property
or on secured or unsecured credit and includes receiving goods or
documents of title under a preexisting contract for sale but does not
include a transfer in bulk or as security for or in total or partial
satisfaction of a money debt.

(b) "Cancellation" occurs when either party puts an end to the
lease contract for default by the other party.

(c) "Commercial unit" means such a unit of goods as by commercial
usage is a single whole for purposes of lease and division of which
materially impairs its character or value on the market or in use. A
"commercial unit" may be a single article, as a machine, or a set of
articles, as a suite of furniture or a line of machinery, or a quantity,
as a gross or carload, or any other unit treated in use or in the
relevant market as a single whole.

(d) "Conforming goods" or "performance under a lease contract"
means goods or performance that are in accordance with the obligations
under the lease contract.

(e) "Consumer lease" means a lease that a lessor regularly engaged
in the business of leasing or selling makes to a lessee who is an
individual and who takes under the lease primarily for a personal, family
or household purpose, if the total payments to be made under the lease
contract, excluding payments for options to renew or buy, do not exceed
$25,000.

(f) "Fault" means wrongful act, omission, breach or default.

(g) "Finance lease" means a lease in which the lessor does not
select, manufacture or supply the goods, the lessor acquires the goods or
the right to possession and use of the goods in connection with the
lease, and either:

(A) The lessee receives a copy of the contract evidencing the
lessor's purchase of the goods on or before signing the lease contract;

(B) The lessee's approval of the contract evidencing the lessor's
purchase of the goods is a condition to effectiveness of the lease
contract;

(C) The lessor informs the lessee in writing of the identity of the
supplier unless the lessee has selected the supplier and directed the
lessor to purchase the goods from the supplier;

(D) The lessor informs the lessee in writing that the lessee may
have rights under the contract evidencing the lessor's purchase of the
goods and the lessor advises the lessee in writing to contact the
supplier for a description of any such rights; or

(E) The lease contract discloses all warranties and other rights
provided to the lessee by the lessor and supplier in connection with the
lease contract and informs the lessee that there are no warranties or
other rights provided to the lessee by the lessor and supplier other than
those disclosed in the lease contract.

(h) "Goods" means all things that are movable at the time of
identification to the lease contract, or are fixtures as provided in ORS
72A.3090, but "goods" does not include money, documents, instruments,
accounts, chattel paper, general intangibles or minerals or the like,
including oil and gas, before extraction. "Goods" also includes the
unborn young of animals.

(i) "Installment lease contract" means a lease contract that
authorizes or requires the delivery of goods in separate lots to be
separately accepted, even though the lease contract contains a clause
"each delivery is a separate lease" or its equivalent.

(j) "Lease" means a transfer of the right to possession and use of
goods for a term in return for consideration, but a sale, including a
sale on approval or a sale or return, or retention or creation of a
security interest is not a lease. Unless the context clearly indicates
otherwise, "lease" includes a sublease.

(k) "Lease agreement" means the bargain, with respect to the lease,
of the lessor and the lessee in fact as found in the language or by
implication from other circumstances including course of dealing or usage
of trade or course of performance as provided in this chapter. Unless the
context clearly indicates otherwise, "lease agreement" includes a
sublease agreement.

(L) "Lease contract" means the total legal obligation that results
from the lease agreement as affected by this chapter and any other
applicable rules of law. Unless the context clearly indicates otherwise,
"lease contract" includes a sublease contract.

(m) "Leasehold interest" means the interest of the lessor or the
lessee under a lease contract.

(n) "Lessee" means a person who acquires the right to possession
and use of goods under a lease. Unless the context clearly indicates
otherwise, "lessee" includes a sublessee.

(o) "Lessee in ordinary course of business" means a person who in
good faith and without knowledge that the lease to the person is in
violation of the ownership rights or security interest or leasehold
interest of a third party in the goods leases in ordinary course from a
person in the business of selling or leasing goods of that kind but does
not include a pawnbroker. "Leasing" may be for cash or by exchange of
other property or on secured or unsecured credit and includes receiving
goods or documents of title under a preexisting lease contract but does
not include a transfer in bulk or as security for or in total or partial
satisfaction of a money debt.

(p) "Lessor" means a person who transfers the right to possession
and use of goods under a lease. Unless the context clearly indicates
otherwise, "lessor" includes a sublessor.

(q) "Lessor's residual interest" means the lessor's interest in the
goods after expiration, termination or cancellation of the lease contract.

(r) "Lien" means a charge against or interest in goods to secure
payment of a debt or performance of an obligation, but "lien" does not
include a security interest.

(s) "Lot" means a parcel or a single article that is the subject
matter of a separate lease or delivery, whether or not it is sufficient
to perform the lease contract.

(t) "Merchant lessee" means a lessee that is a merchant with
respect to goods of the kind subject to the lease.

(u) "Present value" means the amount as of a date certain of one or
more sums payable in the future, discounted to the date certain. The
discount is determined by the interest rate specified by the parties if
the rate was not manifestly unreasonable at the time the transaction was
entered into; otherwise, the discount is determined by a commercially
reasonable rate that takes into account the facts and circumstances of
each case at the time the transaction was entered into.

(v) "Purchase" includes taking by sale, lease, mortgage, security
interest, pledge, gift or any other voluntary transaction creating an
interest in goods.

(w) "Sublease" means a lease of goods the right to possession and
use of which was acquired by the lessor as a lessee under an existing
lease.

(x) "Supplier" means a person from whom a lessor buys or leases
goods to be leased under a finance lease.

(y) "Supply contract" means a contract under which a lessor buys or
leases goods to be leased.

(z) "Termination" occurs when either party pursuant to a power
created by agreement or law puts an end to the lease contract otherwise
than for default.

(2) Other definitions applying to this chapter and the sections in
which they appear are:

(a) "Accessions" as defined in ORS 72A.3100.

(b) "Account" as defined in ORS 79.0102.

(c) "Between merchants" as defined in ORS 72.1040.

(d) "Buyer" as defined in ORS 72.1030.

(e) "Chattel paper" as defined in ORS 79.0102.

(f) "Construction mortgage" as defined in ORS 72A.3090.

(g) "Consumer goods" as defined in ORS 79.0102.

(h) "Document" as defined in ORS 79.0102.

(i) "Encumbrance" as defined in ORS 72A.3090.

(j) "Entrusting" as defined in ORS 72.4030.

(k) "Fixture filing" as defined in ORS 72A.3090.

(L) "Fixtures" as defined in ORS 72A.3090.

(m) "General intangible" as defined in ORS 79.0102.

(n) "Good faith" as defined in ORS 72.1030.

(o) "Instrument" as defined in ORS 79.0102.

(p) "Merchant" as defined in ORS 72.1040.

(q) "Mortgage" as defined in ORS 79.0102.

(r) "Purchase money lease" as defined in ORS 72A.3090.

(s) "Pursuant to commitment" as defined in ORS 79.0102.

(t) "Receipt" as defined in ORS 72.1030.

(u) "Sale" as defined in ORS 72.1060.

(v) "Sale on approval" as defined in ORS 72.3260.

(w) "Sale or return" as defined in ORS 72.3260.

(x) "Seller" as defined in ORS 72.1030.

(3) In addition, ORS chapter 71 contains general definitions and
principles of construction and interpretation applicable throughout this
chapter. [1989 c.676 §3; 1993 c.646 §1; 2001 c.445 §141] (1) A lease, although
subject to this chapter, is also subject to any applicable:

(a) Certificate of title statute of this state;

(b) Certificate of title statute of another jurisdiction as
described in ORS 72A.1050; or

(c) Consumer protection statute of this state, or final consumer
protection decision of a court of this state existing on November 4, 1993.

(2) In case of conflict between this chapter, other than ORS
72A.1050, 72A.3040 and 72A.3050, and a statute or decision referred to in
subsection (1) of this section, the statute or decision controls.

(3) Failure to comply with an applicable law has only the effect
specified therein. [1989 c.676 §4; 1993 c.646 §2]Subject to the provisions of ORS 72A.3040 and
72A.3050, with respect to goods covered by a certificate of title issued
under a statute of this state or of another jurisdiction, compliance and
the effect of compliance or noncompliance with a certificate of title
statute are governed by the law, including the conflict of laws rules, of
the jurisdiction issuing the certificate until the earlier of:

(1) Surrender of the certificate; or

(2) Four months after the goods are removed from that jurisdiction
and thereafter until a new certificate of title is issued by another
jurisdiction. [1989 c.676 §5](1) If the law chosen by the parties
to a consumer lease is that of a jurisdiction other than a jurisdiction
in which the lessee or lessor resides at the time the lease agreement
becomes enforceable or within 30 days thereafter or in which the goods
are to be used, the choice is not enforceable.

(2) If the judicial forum chosen by the parties to a consumer lease
is a forum that would not otherwise have jurisdiction over the lessee,
the choice is not enforceable. [1989 c.676 §6]
Any claim or right arising out of an alleged default or breach of
warranty may be discharged in whole or in part without consideration by a
written waiver or renunciation signed and delivered by the aggrieved
party. [1989 c.676 §7] (1) If the court as a matter of law
finds a lease contract or any clause of a lease contract to have been
unconscionable at the time it was made the court may refuse to enforce
the lease contract, or it may enforce the remainder of the lease contract
without the unconscionable clause, or it may so limit the application of
any unconscionable clause as to avoid any unconscionable result.

(2) When it is claimed or appears to the court that the lease
contract or any clause thereof may be unconscionable, the parties shall
be afforded a reasonable opportunity to present evidence as to its
commercial setting, purpose and effect to aid the court in making the
determination. [1989 c.676 §8] A term providing that one
party or the party's successor in interest may accelerate payment or
performance or require collateral or additional collateral "at will" or
"when the party purports to be insecure" or in words of similar import
must be construed to mean that the party has power to do so only if the
party in good faith believes that the prospect of payment or performance
is impaired. [1989 c.676 §9] Nothing in this chapter
prevents subordination by agreement by any person entitled to priority.
[1993 c.646 §22]FORMATION AND CONSTRUCTION OF LEASE CONTRACT (1) A lease contract is not enforceable
by way of action or defense unless:

(a) The total payments to be made under the lease contract,
excluding payments for options to renew or buy, are less than $1,000; or

(b) There is a writing, signed by the party against whom
enforcement is sought or by that party's authorized agent, sufficient to
indicate that a lease contract has been made between the parties and to
describe the goods leased and the lease term.

(2) Any description of leased goods or of the lease term is
sufficient and satisfies subsection (1)(b) of this section, whether or
not it is specific, if it reasonably identifies what is described.

(3) A writing is not insufficient because it omits or incorrectly
states a term agreed upon, but the lease contract is not enforceable
under subsection (1)(b) of this section beyond the lease term and the
quantity of goods shown in the writing.

(4) A lease contract that does not satisfy the requirements of
subsection (1) of this section, but which is valid in other respects, is
enforceable:

(a) If the goods are to be specially manufactured or obtained for
the lessee and are not suitable for lease or sale to others in the
ordinary course of the lessor's business, and the lessor, before notice
of repudiation is received and under circumstances that reasonably
indicate that the goods are for the lessee, has made either a substantial
beginning of their manufacture or commitments for their procurement;

(b) If the party against whom enforcement is sought admits in that
party's pleading, testimony or otherwise in court that a lease contract
was made, but the lease contract is not enforceable under this provision
beyond the quantity of goods admitted; or

(c) With respect to goods that have been received and accepted by
the lessee.

(5) The lease term under a lease contract referred to in subsection
(4) of this section is:

(a) If there is a writing signed by the party against whom
enforcement is sought or by that party's authorized agent specifying the
lease term, the term so specified;

(b) If the party against whom enforcement is sought admits in that
party's pleading, testimony or otherwise in court a lease term, the term
so admitted; or

(c) A reasonable lease term. [1989 c.676 §10]
Terms with respect to which the confirmatory memoranda of the parties
agree or which are otherwise set forth in a writing intended by the
parties as a final expression of their agreement with respect to such
terms as are included therein may not be contradicted by evidence of any
prior agreement or of a contemporaneous oral agreement but may be
explained or supplemented:

(1) By course of dealing or usage of trade or by course of
performance; and

(2) By evidence of consistent additional terms unless the court
finds the writing to have been intended also as a complete and exclusive
statement of the terms of the agreement. [1989 c.676 §11] The affixing of a seal to a writing
evidencing a lease contract or an offer to enter into a lease contract
does not render the writing a sealed instrument and the law with respect
to sealed instruments does not apply to the lease contract or offer.
[1989 c.676 §12] (1) A lease contract may be made in
any manner sufficient to show agreement, including conduct by both
parties which recognizes the existence of a lease contract.

(2) An agreement sufficient to constitute a lease contract may be
found although the moment of its making is undetermined.

(3) Although one or more terms are left open, a lease contract does
not fail for indefiniteness if the parties have intended to make a lease
contract and there is a reasonably certain basis for giving an
appropriate remedy. [1989 c.676 §13] An offer by a merchant to lease goods to or
from another person in a signed writing that by its terms gives assurance
it will be held open is not revocable, for lack of consideration, during
the time stated or, if no time is stated, for a reasonable time, but in
no event may the period of irrevocability exceed three months. Any such
term of assurance on a form supplied by the offeree must be separately
signed by the offeror. [1989 c.676 §14] (1)
Unless otherwise unambiguously indicated by the language or
circumstances, an offer to make a lease contract must be construed as
inviting acceptance in any manner and by any medium reasonable in the
circumstances.

(2) If the beginning of a requested performance is a reasonable
mode of acceptance, an offeror who is not notified of acceptance within a
reasonable time may treat the offer as having lapsed before acceptance.
[1989 c.676 §15] (1) If a
lease contract involves repeated occasions for performance by either
party with knowledge of the nature of the performance and opportunity for
objection to it by the other, any course of performance accepted or
acquiesced in without objection is relevant to determine the meaning of
the lease agreement.

(2) The express terms of a lease agreement and any course of
performance, as well as any course of dealing and usage of trade, must be
construed whenever reasonable as consistent with each other; but if that
construction is unreasonable, express terms control course of
performance, course of performance controls both course of dealing and
usage of trade, and course of dealing controls usage of trade.

(3) Subject to the provisions of ORS 72A.2080 on modification and
waiver, course of performance is relevant to show a waiver or
modification of any term inconsistent with the course of performance.
[1989 c.676 §16] (1) An agreement
modifying a lease contract needs no consideration to be binding.

(2) A signed lease agreement that excludes modification or
rescission except by a signed writing may not be otherwise modified or
rescinded, but, except as between merchants, such a requirement on a form
supplied by a merchant must be separately signed by the other party.

(3) Although an attempt at modification or rescission does not
satisfy the requirements of subsection (2) of this section, it may
operate as a waiver.

(4) A party who has made a waiver affecting an executory portion of
a lease contract may retract the waiver by reasonable notification
received by the other party that strict performance will be required of
any term waived, unless the retraction would be unjust in view of a
material change of position in reliance on the waiver. [1989 c.676 §17](1) The benefit of a supplier's promises to the lessor under
the supply contract and of all warranties, whether express or implied,
including those of any third party provided in connection with or as part
of the supply contract, extends to the lessee to the extent of the
lessee's leasehold interest under a finance lease related to the supply
contract, but is subject to the terms of the warranty and of the supply
contract and all defenses or claims arising therefrom.

(2) The extension of the benefit of a supplier's promises and of
warranties to the lessee under subsection (1) of this section does not:

(a) Modify the rights and obligations of the parties to the supply
contract, whether arising therefrom or otherwise; or

(b) Impose any duty or liability under the supply contract on the
lessee.

(3) Any modification or rescission of the supply contract by the
supplier and the lessor is effective between the supplier and the lessee
unless, before the modification or rescission, the supplier has received
notice that the lessee has entered into a finance lease related to the
supply contract. If the modification or rescission is effective between
the supplier and the lessee, the lessor is deemed to have assumed, in
addition to the obligations of the lessor to the lessee under the lease
contract, promises of the supplier to the lessor and warranties that were
so modified or rescinded as they existed and were available to the lessee
before modification or rescission.

(4) In addition to the extension of the benefit of the supplier's
promises and of warranties to the lessee under subsection (1) of this
section, the lessee retains all rights that the lessee may have against
the supplier that arise from an agreement between the lessee and the
supplier or under other law. [1989 c.676 §18; 1993 c.646 §3] (1) Express warranties by the lessor
are created as follows:

(a) Any affirmation of fact or promise made by the lessor to the
lessee which relates to the goods and becomes part of the basis of the
bargain creates an express warranty that the goods will conform to the
affirmation or promise.

(b) Any description of the goods which is made part of the basis of
the bargain creates an express warranty that the goods will conform to
the description.

(c) Any sample or model that is made part of the basis of the
bargain creates an express warranty that the whole of the goods will
conform to the sample or model.

(2) It is not necessary to the creation of an express warranty that
the lessor use formal words, such as "warrant" or "guarantee," or that
the lessor have a specific intention to make a warranty, but an
affirmation merely of the value of the goods or a statement purporting to
be merely the lessor's opinion or commendation of the goods does not
create a warranty. [1989 c.676 §19](1) There is in a lease
contract a warranty that for the lease term no person holds a claim to or
interest in the goods that arose from an act or omission of the lessor,
other than a claim by way of infringement or the like, which will
interfere with the lessee's enjoyment of its leasehold interest.

(2) Except in a finance lease there is in a lease contract by a
lessor who is a merchant regularly dealing in goods of the kind a
warranty that the goods are delivered free of the rightful claim of any
person by way of infringement or the like.

(3) A lessee who furnishes specifications to a lessor or a supplier
shall hold the lessor and the supplier harmless against any claim by way
of infringement or the like that arises out of compliance with the
specifications. [1989 c.676 §20] (1) Except in a
finance lease, a warranty that the goods will be merchantable is implied
in a lease contract if the lessor is a merchant with respect to goods of
that kind.

(2) Goods to be merchantable must at least:

(a) Pass without objection in the trade under the description in
the lease agreement;

(b) In the case of fungible goods, be of fair average quality
within the description;

(c) Be fit for the ordinary purposes for which goods of that type
are used;

(d) Run, within the variation permitted by the lease agreement, of
even kind, quality and quantity within each unit and among all units
involved;

(e) Be adequately contained, packaged and labeled as the lease
agreement may require; and

(f) Conform to any promises or affirmations of fact made on the
container or label.

(3) Other implied warranties may arise from course of dealing or
usage of trade. [1989 c.676 §21] Except
in a finance lease, if the lessor at the time the lease contract is made
has reason to know of any particular purpose for which the goods are
required and that the lessee is relying on the lessor's skill or judgment
to select or furnish suitable goods, there is in the lease contract an
implied warranty that the goods will be fit for that purpose. [1989 c.676
§22] (1) Words or
conduct relevant to the creation of an express warranty and words or
conduct tending to negate or limit a warranty must be construed wherever
reasonable as consistent with each other; but, subject to the provisions
of ORS 72A.2020 on parol or extrinsic evidence, negation or limitation is
inoperative to the extent that the construction is unreasonable.

(2) Subject to subsection (3) of this section, to exclude or modify
the implied warranty of merchantability or any part of it, the language
must mention "merchantability," be by a writing and be conspicuous.
Subject to subsection (3) of this section, to exclude or modify any
implied warranty of fitness the exclusion must be by a writing and be
conspicuous. Language to exclude all implied warranties of fitness is
sufficient if it is in writing, is conspicuous and states, for example,
"There is no warranty that the goods will be fit for a particular
purpose."

(3) Notwithstanding subsection (2) of this section, but subject to
subsection (4) of this section:

(a) Unless the circumstances indicate otherwise, all implied
warranties are excluded by the expressions "as is," or "with all faults,"
or by other language that in common understanding calls the lessee's
attention to the exclusion of warranties and makes plain that there is no
implied warranty, if in writing and conspicuous;

(b) If the lessee before entering into the lease contract has
examined the goods or the sample or model as fully as desired or has
refused to examine the goods, there is no implied warranty with regard to
defects that an examination ought in the circumstances to have revealed;
and

(c) An implied warranty may also be excluded or modified by course
of dealing, course of performance or usage of trade.

(4) To exclude or modify a warranty against interference or against
infringement as provided in ORS 72A.2110 or any part of it, the language
must be specific, be by a writing, and be conspicuous, unless the
circumstances, including course of performance, course of dealing or
usage of trade, give the lessee reason to know that the goods are being
leased subject to a claim or interest of any person. [1989 c.676 §23]
Warranties, whether express or implied, must be construed as consistent
with each other and as cumulative, but if that construction is
unreasonable, the intention of the parties determines which warranty is
dominant. In ascertaining that intention, the following rules apply:

(1) Exact or technical specifications displace an inconsistent
sample or model or general language of description.

(2) A sample from an existing bulk displaces inconsistent general
language of description.

(3) Express warranties displace inconsistent implied warranties
other than an implied warranty of fitness for a particular purpose. [1989
c.676 §24]A warranty to or for the benefit of a lessee under this
chapter, whether express or implied, extends to any natural person who is
in the family or household of the lessee or who is a guest in the
lessee's home if it is reasonable to expect that such person may use,
consume or be affected by the goods and who is injured in person by
breach of the warranty. This section does not displace principles of law
and equity that extend a warranty to or for the benefit of a lessee to
other persons. The operation of this section may not be excluded,
modified or limited, but an exclusion, modification or limitation of the
warranty, including any with respect to rights and remedies, effective
against the lessee is also effective against any beneficiary designated
under this section. [1989 c.676 §25] Identification of goods as goods to which
a lease contract refers may be made at any time and in any manner
explicitly agreed to by the parties. In the absence of explicit
agreement, identification occurs:

(1) When the lease contract is made if the lease contract is for a
lease of goods that are existing and identified;

(2) When the goods are shipped, marked or otherwise designated by
the lessor as goods to which the lease contract refers, if the lease
contract is for a lease of goods that are not existing and identified; or

(3) When the young are conceived, if the lease contract is for a
lease of unborn young of animals. [1989 c.676 §26] (1) A lessee obtains an insurable
interest when existing goods are identified to the lease contract even
though the goods identified are nonconforming and the lessee has an
option to reject them.

(2) If a lessee has an insurable interest only by reason of the
lessor's identification of the goods, the lessor, until default or
insolvency or notification to the lessee that identification is final,
may substitute other goods for those identified.

(3) Notwithstanding a lessee's insurable interest under subsections
(1) and (2) of this section, the lessor retains an insurable interest
until an option to buy has been exercised by the lessee and risk of loss
has passed to the lessee.

(4) Nothing in this section impairs any insurable interest
recognized under any other statute or rule of law.

(5) The parties by agreement may determine that one or more parties
have an obligation to obtain and pay for insurance covering the goods and
by agreement may determine the beneficiary of the proceeds of the
insurance. [1989 c.676 §27] (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 ORS 72A.2200 on the effect of
default on risk of loss, 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, 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 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 described in paragraph (a) or (b) of this
subsection, 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. [1989 c.676 §28] (1) Where risk of loss
is to pass to the lessee and the time of passage is not stated:

(a) If a tender or delivery of goods so fails to conform to the
lease contract as to give a right of rejection, the risk of their loss
remains with the lessor or, in the case of a finance lease, the supplier,
until cure or acceptance.

(b) If the lessee rightfully revokes acceptance, the lessee, to the
extent of any deficiency in the lessee's effective insurance coverage,
may treat the risk of loss as having remained with the lessor from the
beginning.

(2) Whether or not risk of loss is to pass to the lessee, if the
lessee as to conforming goods already identified to a lease contract
repudiates or is otherwise in default under the lease contract, the
lessor, or, in the case of a finance lease, the supplier, to the extent
of any deficiency in the lessor's or supplier's effective insurance
coverage may treat the risk of loss as resting on the lessee for a
commercially reasonable time. [1989 c.676 §29] If a lease contract requires
goods identified when the lease contract is made, and the goods suffer
casualty without fault of the lessee, the lessor or the supplier before
delivery, or the goods suffer casualty before risk of loss passes to the
lessee pursuant to the lease agreement or ORS 72A.2190, then:

(1) If the loss is total, the lease contract is avoided; and

(2) If the loss is partial or the goods have so deteriorated as to
no longer conform to the lease contract, the lessee may nevertheless
demand inspection and at the lessee's option either treat the lease
contract as avoided or, except in a finance lease, accept the goods with
due allowance from the rent payable for the balance of the lease term for
the deterioration or the deficiency in quantity but without further right
against the lessor. [1989 c.676 §30]EFFECT OF LEASE CONTRACT Except as otherwise
provided in this chapter, a lease contract is effective and enforceable
according to its terms between the parties, against purchasers of the
goods and against creditors of the parties. [1989 c.676 §31] Except as otherwise
provided in this chapter, each provision of this chapter applies whether
the lessor or a third party has title to the goods, and whether the
lessor, the lessee or a third party has possession of the goods,
notwithstanding any statute or rule of law that possession or the absence
of possession is fraudulent. [1989 c.676 §32](1) As used in this section, "creation of a security
interest" includes the sale of a lease contract that is subject to ORS
79.0109 (1)(c).

(2) Except as provided in subsection (3) of this section and ORS
79.0407, a provision in a lease agreement that prohibits the voluntary or
involuntary transfer, including a transfer by sale, sublease, creation or
enforcement of a security interest, or attachment, levy or other judicial
process, of an interest of a party under the lease contract or of the
lessor's residual interest in the goods, or that makes such a transfer an
event of default, gives rise to the rights and remedies provided in
subsection (4) of this section, but a transfer that is prohibited or is
an event of default under the lease agreement is otherwise effective.

(3) A provision in a lease agreement is not enforceable if the
provision prohibits a transfer of a right to damages for default with
respect to the whole lease contract or of a right to payment arising out
of the transferor's due performance of the transferor's entire obligation
or makes such a transfer an event of default. A transfer that is not
enforceable under this section is not a transfer that materially impairs
the prospect of obtaining return performance by, materially changes the
duty of, or materially increases the burden or risk imposed on, the other
party to the lease contract under subsection (4) of this section.

(4) Subject to subsection (3) of this section and ORS 79.0407:

(a) If a transfer is made that is made an event of default under a
lease agreement, the party to the lease contract not making the transfer
has the rights and remedies described in ORS 72A.5010 (2), unless the
party waives the default or otherwise agrees; or

(b) If paragraph (a) of this subsection is not applicable and a
transfer is made that is prohibited under a lease agreement or that
materially impairs the prospect of obtaining return performance by,
materially changes the duty of, or materially increases the burden or
risk imposed on, the other party to the lease contract, then, unless the
party not making the transfer agrees at any time to the transfer in the
lease contract or otherwise, and except as limited by contract:

(A) The transferor is liable to the party not making the transfer
for damages caused by the transfer to the extent that the damages could
not reasonably be prevented by the party not making the transfer; and

(B) A court having jurisdiction may grant other appropriate relief,
including cancellation of the lease contract or an injunction.

(5) A transfer of "the lease" or of "all my rights under the lease"
or a transfer in similar general terms is a transfer of rights, and
unless the language or the circumstances indicate the contrary, as in a
transfer for security, the transfer is a delegation of duties by the
transferor to the transferee. Acceptance by the transferee constitutes a
promise by the transferee to perform those duties. The promise is
enforceable by either the transferor or the other party to the lease
contract.

(6) Unless otherwise agreed by the lessor and the lessee, a
delegation of performance does not relieve the transferor as against the
other party of any duty to perform or of any liability for default.

(7) In a consumer lease, to prohibit the transfer of an interest of
a party under the lease contract or to make a transfer an event of
default, the language must be specific, by a writing, and conspicuous.
[1989 c.676 §33; 1993 c.646 §4; 2001 c.445 §142]Note: For transition provisions regarding secured transactions, see
notes under 79.0628. (1) Subject to ORS
72A.3030, a subsequent lessee from a lessor of goods under an existing
lease contract obtains, to the extent of the leasehold interest
transferred, the leasehold interest in the goods that the lessor had or
had power to transfer, and except as provided in subsection (2) of this
section and ORS 72A.5270 (4), takes subject to the existing lease
contract. A lessor with voidable title has power to transfer a good
leasehold interest to a good faith subsequent lessee for value, but only
to the extent set forth in the preceding sentence. If goods have been
delivered under a transaction of purchase, the lessor has that power even
though:

(a) The lessor's transferor was deceived as to the identity of the
lessor;

(b) The delivery was in exchange for a check which is later
dishonored;

(c) It was agreed that the transaction was to be a "cash sale"; or

(d) The delivery was procured through fraud punishable as larcenous
under the criminal law.

(2) A subsequent lessee in the ordinary course of business from a
lessor who is a merchant dealing in goods of that kind to whom the goods
were entrusted by the existing lessee of that lessor before the interest
of the subsequent lessee became enforceable against that lessor obtains,
to the extent of the leasehold interest transferred, all of that lessor's
and the existing lessee's rights to the goods, and takes free of the
existing lease contract.

(3) A subsequent lessee from the lessor of goods that are subject
to an existing lease contract and are covered by a certificate of title
issued under a statute of this state or of another jurisdiction takes no
greater rights than those provided both by this section and by the
certificate of title statute. [1989 c.676 §34; 1993 c.646 §5] (1) Subject to the
provisions of ORS 72A.3030, a buyer or sublessee from the lessee of goods
under an existing lease contract obtains, to the extent of the interest
transferred, the leasehold interest in the goods that the lessee had or
had power to transfer, and except as provided in subsection (2) of this
section and ORS 72A.5110 (4), takes subject to the existing lease
contract. A lessee with a voidable leasehold interest has power to
transfer a good leasehold interest to a good faith buyer for value or a
good faith sublessee for value, but only to the extent set forth in the
preceding sentence. When goods have been delivered under a transaction of
lease the lessee has that power even though:

(a) The lessor was deceived as to the identity of the lessee;

(b) The delivery was in exchange for a check which is later
dishonored; or

(c) The delivery was procured through fraud punishable as larcenous
under the criminal law.

(2) A buyer in the ordinary course of business or a sublessee in
the ordinary course of business from a lessee who is a merchant dealing
in goods of that kind to whom the goods were entrusted by the lessor
obtains, to the extent of the interest transferred, all of the lessor's
and lessee's rights to the goods, and takes free of the existing lease
contract.

(3) A buyer or sublessee from the lessee of goods that are subject
to an existing lease contract and are covered by a certificate of title
issued under a statute of this state or of another jurisdiction takes no
greater rights than those provided both by this section and by the
certificate of title statute. [1989 c.676 §35] If
a person in the ordinary course of the person's business furnishes
services or materials with respect to goods subject to a lease contract,
a lien upon those goods in the possession of that person given by statute
or rule of law for those materials or services takes priority over any
interest of the lessor or lessee under the lease contract or this chapter
unless the lien is created by statute and the statute provides otherwise
or unless the lien is created by rule of law and the rule of law provides
otherwise. [1989 c.676 §36](1) Except as otherwise
provided in ORS 72A.3060, a creditor of a lessee takes subject to the
lease contract.

(2) Except as otherwise provided in subsection (3) of this section
and in ORS 72A.3060 and 72A.3080, a creditor of a lessor takes subject to
the lease contract unless the creditor holds a lien that attached to the
goods before the lease contract became enforceable.

(3) Except as otherwise provided in ORS 79.0317, 79.0321 and
79.0323, a lessee takes a leasehold interest subject to a security
interest held by a creditor of the lessor. [1989 c.676 §37; 1993 c.646
§6; 2001 c.445 §143]Note: For transition provisions regarding secured transactions, see
notes under 79.0628. (1) A creditor of a lessor in
possession of goods subject to a lease contract may treat the lease
contract as void if as against the creditor retention of possession by
the lessor is fraudulent under any statute or rule of law, but retention
of possession in good faith and current course of trade by the lessor for
a commercially reasonable time after the lease contract becomes
enforceable is not fraudulent.

(2) Nothing in this chapter impairs the rights of creditors of a
lessor if the lease contract:

(a) Becomes enforceable, not in current course of trade but in
satisfaction of or as security for a preexisting claim for money,
security or the like; and

(b) Is made under circumstances which under any statute or rule of
law apart from this chapter would constitute the transaction a fraudulent
transfer or voidable preference.

(3) A creditor of a seller may treat a sale or an identification of
goods to a contract for sale as void if as against the creditor retention
of possession by the seller is fraudulent under any statute or rule of
law, but retention of possession of the goods pursuant to a lease
contract entered into by the seller as lessee and the buyer as lessor in
connection with the sale or identification of the goods is not fraudulent
if the buyer bought for value and in good faith. [1989 c.676 §38]
(1) As used in this section:

(a) Goods are "fixtures" when they become so related to particular
real estate that an interest in them arises under real estate law;

(b) A "fixture filing" is the filing, in the office where a record
of a mortgage on the real estate would be filed or recorded, of a
financing statement covering goods that are or are to become fixtures and
conforming to the requirements of ORS 79.0502 (1) and (2);

(c) A lease is a "purchase money lease" unless the lessee has
possession or use of the goods or the right to possession or use of the
goods before the lease agreement is enforceable;

(d) A mortgage is a "construction mortgage" to the extent it
secures an obligation incurred for the construction of an improvement on
land including the acquisition cost of the land, if the recorded writing
so indicates; and

(e) "Encumbrance" includes real estate mortgages and other liens on
real estate and all other rights in real estate that are not ownership
interests.

(2) Under this chapter a lease may be of goods that are fixtures or
may continue in goods that become fixtures, but no lease exists under
this chapter of ordinary building materials incorporated into an
improvement on land.

(3) This chapter does not prevent creation of a lease of fixtures
pursuant to real estate law.

(4) The perfected interest of a lessor of fixtures has priority
over a conflicting interest of an encumbrancer or owner of the real
estate if:

(a) The lease is a purchase money lease, the conflicting interest
of the encumbrancer or owner arises before the goods become fixtures, the
interest of the lessor is perfected by a fixture filing before the goods
become fixtures or within 20 days thereafter, and the lessee has an
interest of record in the real estate or is in possession of the real
estate; or

(b) The interest of the lessor is perfected by a fixture filing
before the interest of the encumbrancer or owner is of record, the
lessor's interest has priority over any conflicting interest of a
predecessor in title of the encumbrancer or owner, and the lessee has an
interest of record in the real estate or is in possession of the real
estate.

(5) The interest of a lessor of fixtures, whether or not perfected,
has priority over the conflicting interest of an encumbrancer or owner of
the real estate if:

(a) The fixtures are readily removable factory or office machines,
readily removable equipment that is not primarily used or leased for use
in the operation of the real estate, or readily removable replacements of
domestic appliances that are goods subject to a consumer lease, and
before the goods become fixtures the lease contract is enforceable;

(b) The conflicting interest is a lien on the real estate obtained
by legal or equitable proceedings after the lease contract is enforceable;

(c) The encumbrancer or owner has consented in writing to the lease
or has disclaimed an interest in the goods as fixtures; or

(d) The lessee has a right to remove the goods as against the
encumbrancer or owner. If the lessee's right to remove terminates, the
priority of the interest of the lessor continues for a reasonable time.

(6) Notwithstanding subsection (4)(a) of this section but otherwise
subject to subsections (4) and (5) of this section, the interest of a
lessor of fixtures, including the lessor's residual interest, is
subordinate to the conflicting interest of an encumbrancer of the real
estate under a construction mortgage recorded before the goods become
fixtures if the goods become fixtures before the completion of the
construction. To the extent given to refinance a construction mortgage,
the conflicting interest of an encumbrancer of the real estate under a
mortgage has this priority to the same extent as the encumbrancer of the
real estate under the construction mortgage.

(7) In cases not within subsections (1) to (6) of this section,
priority between the interest of a lessor of fixtures, including the
lessor's residual interest, and the conflicting interest of an
encumbrancer or owner of the real estate who is not the lessee is
determined by the priority rules governing conflicting interests in real
estate.

(8) If the interest of a lessor of fixtures, including the lessor's
residual interest, has priority over all conflicting interests of all
owners and encumbrancers of the real estate, the lessor or the lessee may
on default, expiration, termination or cancellation of the lease
agreement, but subject to the lease agreement and this chapter, or if
necessary to enforce the lessor's or lessee's other rights and remedies
under this chapter, remove the goods from the real estate, free and clear
of all conflicting interests of all owners and encumbrancers of the real
estate, but the lessor or lessee must reimburse any encumbrancer or owner
of the real estate who is not the lessee and who has not otherwise agreed
for the cost of repair of any physical injury, but not for any diminution
in value of the real estate caused by the absence of the goods removed or
by any necessity of replacing them. A person entitled to reimbursement
may refuse permission to remove until the party seeking removal gives
adequate security for the performance of this obligation.

(9) Even though the lease agreement does not create a security
interest, the interest of a lessor of fixtures, including the lessor's
residual interest, is perfected by filing a financing statement as a
fixture filing for leased goods that are or are to become fixtures in
accordance with the relevant provisions of ORS chapter 79. [1989 c.676
§39; 1993 c.646 §7; 1999 c.645 §2; 2001 c.445 §144] (1) A
financing statement filed as a fixture filing under ORS 72A.3090 shall be
recorded and indexed as a mortgage on the real estate.

(2) ORS 79.0523 does not apply to a financing statement recorded
and indexed as a mortgage under this section. [1999 c.715 §7; 2001 c.445
§145]
(1) Goods are "accessions" when they are installed in or affixed to other
goods.

(2) The interest of a lessor or a lessee under a lease contract
entered into before the goods became accessions is superior to all
interests in the whole except as stated in subsection (4) of this section.

(3) The interest of a lessor or a lessee under a lease contract
entered into at the time or after the goods became accessions is superior
to all subsequently acquired interests in the whole except as stated in
subsection (4) of this section but is subordinate to interests in the
whole existing at the time the lease contract was made unless the holders
of such interests in the whole have in writing consented to the lease or
disclaimed an interest in the goods as part of the whole.

(4) The interest of a lessor or a lessee under a lease contract
described in subsection (2) or (3) of this section is subordinate to the
interest of:

(a) A buyer in the ordinary course of business or a lessee in the
ordinary course of business of any interest in the whole acquired after
the goods became accessions; or

(b) A creditor with a security interest in the whole perfected
before the lease contract was made to the extent that the creditor makes
subsequent advances without knowledge of the lease contract.

(5) When under subsections (2) or (3) and (4) of this section, a
lessor or a lessee of accessions holds an interest that is superior to
all interests in the whole, the lessor or the lessee may on default,
expiration, termination or cancellation of the lease contract by the
other party but subject to the provisions of the lease contract and this
chapter, or if necessary to enforce the lessor's or lessee's other rights
and remedies under this chapter, remove the goods from the whole, free
and clear of all interests in the whole, but the lessor or lessee must
reimburse any holder of an interest in the whole who is not the lessee
and who has not otherwise agreed for the cost of repair of any physical
injury but not for any diminution in value of the whole caused by the
absence of the goods removed or by any necessity for replacing them. A
person entitled to reimbursement may refuse permission to remove until
the party seeking removal gives adequate security for the performance of
this obligation. [1989 c.676 §40]PERFORMANCE OF LEASE CONTRACT: REPUDIATED, SUBSTITUTED AND EXCUSED (1) A lease
contract imposes an obligation on each party that the other's expectation
of receiving due performance will not be impaired.

(2) If reasonable grounds for insecurity arise with respect to the
performance of either party, the insecure party may demand in writing
adequate assurance of due performance. Until the insecure party receives
that assurance, if commercially reasonable, the insecure party may
suspend any performance for which the insecure party has not already
received the agreed return.

(3) A repudiation of the lease contract occurs if assurance of due
performance adequate under the circumstances of the particular case is
not provided to the insecure party within a reasonable time, not to
exceed 30 days after receipt of a demand by the other party.

(4) Between merchants, the reasonableness of grounds for insecurity
and the adequacy of any assurance offered must be determined according to
commercial standards.

(5) Acceptance of any nonconforming delivery or payment does not
prejudice the aggrieved party's right to demand adequate assurance of
future performance. [1989 c.676 §41] If either party repudiates a
lease contract with respect to a performance not yet due under the lease
contract, the loss of which performance will substantially impair the
value of the lease contract to the other, the aggrieved party may:

(1) For a commercially reasonable time, await retraction of
repudiation and performance by the repudiating party;

(2) Make demand pursuant to ORS 72A.4010 and await assurance of
future performance adequate under the circumstances of the particular
case; or

(3) Resort to any right or remedy upon default under the lease
contract or this chapter, even though the aggrieved party has notified
the repudiating party that the aggrieved party would await the
repudiating party's performance and assurance and has urged retraction.
In addition, whether or not the aggrieved party is pursuing one of the
foregoing remedies, the aggrieved party may suspend performance or, if
the aggrieved party is the lessor, proceed in accordance with the
provisions of ORS 72A.5240 on the lessor's right to identify goods to the
lease contract notwithstanding default or to salvage unfinished goods.
[1989 c.676 §42] (1) Until the
repudiating party's next performance is due, the repudiating party can
retract the repudiation unless, since the repudiation, the aggrieved
party has canceled the lease contract or materially changed the aggrieved
party's position or otherwise indicated that the aggrieved party
considers the repudiation final.

(2) Retraction may be by any method that clearly indicates to the
aggrieved party that the repudiating party intends to perform under the
lease contract and includes any assurance demanded under ORS 72A.4010.

(3) Retraction reinstates a repudiating party's rights under a
lease contract with due excuse and allowance to the aggrieved party for
any delay occasioned by the repudiation. [1989 c.676 §43] (1) If without fault of the
lessee, the lessor and the supplier, the agreed berthing, loading or
unloading facilities fail or the agreed type of carrier becomes
unavailable or the agreed manner of delivery otherwise becomes
commercially impracticable, but a commercially reasonable substitute is
available, the substitute performance must be tendered and accepted.

(2) If the agreed means or manner of payment fails because of
domestic or foreign governmental regulation:

(a) The lessor may withhold or stop delivery or cause the supplier
to withhold or stop delivery unless the lessee provides a means or manner
of payment that is commercially a substantial equivalent; and

(b) If delivery has already been taken, payment by the means or in
the manner provided by the regulation discharges the lessee's obligation
unless the regulation is discriminatory, oppressive or predatory. [1989
c.676 §44]Subject to ORS 72A.4040 on
substituted performance, the following rules apply:

(1) Delay in delivery or nondelivery in whole or in part by a
lessor or a supplier who complies with subsections (2) and (3) of this
section is not a default under the lease contract if performance as
agreed has been made impracticable by the occurrence of a contingency the
nonoccurrence of which was a basic assumption on which the lease contract
was made or by compliance in good faith with any applicable foreign or
domestic governmental regulation or order, whether or not the regulation
or order later proves to be invalid.

(2) If the causes mentioned in subsection (1) of this section
affect only part of the lessor's or the supplier's capacity to perform,
the lessor or supplier shall allocate production and deliveries among the
lessor's or supplier's customers but at the lessor's or supplier's option
may include regular customers not then under contract for sale or lease
as well as the lessor or supplier's own requirements for further
manufacture. The lessor or supplier may so allocate in any manner that is
fair and reasonable.

(3) The lessor seasonably shall notify the lessee and in the case
of a finance lease the supplier seasonably shall notify the lessor and
the lessee, if known, that there will be delay or nondelivery and, if
allocation is required under subsection (2) of this section, of the
estimated quota thus made available for the lessee. [1989 c.676 §45] (1) If the lessee
receives notification of a material or indefinite delay or an allocation
justified under ORS 72A.4050, the lessee may by written notification to
the lessor as to any goods involved, and with respect to all of the goods
if under an installment lease contract the value of the whole lease
contract is substantially impaired as provided under ORS 72A.5100:

(a) Terminate the lease contract under ORS 72A.5050; or

(b) Except in a finance lease, modify the lease contract by
accepting the available quota in substitution, with due allowance from
the rent payable for the balance of the lease term for the deficiency but
without further right against the lessor.

(2) If, after receipt of a notification from the lessor under ORS
72A.4050, the lessee fails so to modify the lease agreement within a
reasonable time not exceeding 30 days, the lease contract lapses with
respect to any deliveries affected. [1989 c.676 §46] (1) In the case of a
finance lease that is not a consumer lease the lessee's promises under
the lease contract become irrevocable and independent upon the lessee's
acceptance of the goods.

(2) A promise that has become irrevocable and independent under
subsection (1) of this section:

(a) Is effective and enforceable between the parties, and by or
against third parties including assignees of the parties; and

(b) Is not subject to cancellation, termination, modification,
repudiation, excuse or substitution without the consent of the party to
whom the promise runs.

(3) This section shall not affect the validity under any other law
of a covenant in any lease contract making the lessee's promises
irrevocable and independent upon the lessee's acceptance of the goods.
[1989 c.676 §47]DEFAULT (1) Whether the lessor or the lessee
is in default under a lease contract is determined by the lease agreement
and this chapter.

(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 chapter and, except as limited by this chapter, 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 chapter.

(4) Except as otherwise provided in ORS 71.1060, this chapter or
the lease agreement, the rights and remedies referred to in subsections
(2) and (3) of this section are cumulative.

(5) If the lease agreement covers both real property and goods, the
party seeking enforcement may proceed under ORS 72A.5010 to 72A.5310 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 of the real property, in which case ORS 72A.5010 to 72A.5310 do
not apply. [1989 c.676 §48; 1993 c.646 §8] Except as otherwise provided in this
chapter or the lease agreement, the lessor or lessee in default under the
lease contract is not entitled to notice of default or notice of
enforcement from the other party to the lease agreement. [1989 c.676 §49] (1)
Except as otherwise provided in this chapter, the lease agreement may
include rights and remedies for default in addition to or in substitution
for those provided in this chapter and may limit or alter the measure of
damages recoverable under this chapter.

(2) Resort to a remedy provided under this chapter or in the lease
agreement is optional unless the remedy is expressly agreed to be
exclusive. If circumstances cause an exclusive or limited remedy to fail
of its essential purpose, or provision for an exclusive remedy is
unconscionable, remedy may be had as provided in this chapter.

(3) Consequential damages may be liquidated under ORS 72A.5040, or
may otherwise be limited, altered or excluded unless the limitation,
alteration or exclusion is unconscionable. Limitation, alteration or
exclusion of consequential damages for injury to the person in the case
of consumer goods is prima facie unconscionable but limitation,
alteration or exclusion of damages where the loss is commercial is not
prima facie unconscionable.

(4) Rights and remedies on default by the lessor or the lessee with
respect to any obligation or promise collateral or ancillary to the lease
contract are not impaired by this chapter. [1989 c.676 §50; 1993 c.646 §9] (1) Damages payable by either
party for default, or any other act or omission, including indemnity for
loss or diminution of anticipated tax benefits or loss or damage to the
lessor's residual interest, may be liquidated in the lease agreement but
only at an amount or by a formula that is reasonable in light of the then
anticipated harm caused by the default or other act or omission. A
provision in the lease agreement which states that damages in the event
of the lessee's default and the lessor's sale of the goods include, in
addition to costs payable to third parties, any past due amounts plus the
sum of the present value of future rentals, the lessor's costs of
enforcing the lease, the lessor's reasonably predictable residual at
expiration, reasonable compensation for any loss of tax benefits, or an
equivalent amount, and any other damages suffered or to be suffered by
the lessor because of the lessee's default, less the net proceeds of
sale, is reasonable.

(2) If the lease agreement provides for liquidation of damages, and
such provision does not comply with subsection (1) of this section, or
such provision is an exclusive or limited remedy that circumstances cause
to fail of its essential purpose, remedy may be had as provided in this
chapter.

(3) If the lessor justifiably withholds or stops delivery of goods
because of the lessee's default or insolvency under ORS 72A.5250 or
72A.5260, the lessee is entitled to restitution of any amount by which
the sum of the lessee's payments exceeds:

(a) The amount to which the lessor is entitled by virtue of terms
liquidating the lessor's damages in accordance with subsection (1) of
this section; or

(b) In the absence of those terms, 20 percent of the then present
value of the total rent the lessee was obligated to pay for the balance
of the lease term, or, in the case of a consumer lease, the lesser of
such amount or $500.

(4) A lessee's right to restitution under subsection (3) of this
section is subject to offset to the extent the lessor establishes:

(a) A right to recover damages under the provisions of this chapter
other than subsection (1) of this section; and

(b) The amount or value of any benefits received by the lessee
directly or indirectly by reason of the lease contract. [1989 c.676 §51](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 chapter 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 considered
inconsistent with a claim for damages or other right or remedy. [1989
c.676 §52] (1) An action for default under a
lease contract, including breach of warranty or indemnity, must be
commenced within four years after the cause of action accrued. By the
original lease contract the parties may reduce the period of limitation
to not less than two years.

(2) A cause of action for default accrues when the act or omission
on which the default or breach of warranty is based is or should have
been discovered by the aggrieved party, or when the default occurs,
whichever is later. A cause of action for indemnity accrues when the act
or omission on which the claim for indemnity is based is or should have
been discovered by the indemnified party, whichever is later.

(3) If an action commenced within the time limited by subsection
(1) of this section is so terminated as to leave available a remedy by
another action for the same default or breach of warranty or indemnity,
the other action may be commenced after the expiration of the time
limited and within six months after the termination of the first action
unless the termination resulted from voluntary discontinuance or from
dismissal for failure or neglect to prosecute.

(4) This section does not alter the law on tolling of the statute
of limitations nor does it apply to causes of action that have accrued
before this chapter becomes effective. [1989 c.676 §53] (1) Damages based on
market rent under ORS 72A.5190 or 72A.5280 are determined according to
the rent for the use of the goods concerned for a lease term identical to
the remaining lease term of the original lease agreement and prevailing
at the time of the default.

(2) If evidence of rent for the use of the goods concerned for a
lease term identical to the remaining lease term of the original lease
agreement and prevailing at the times or places described in this chapter
is not readily available, the rent prevailing within any reasonable time
before or after the time described or at any other place or for a
different lease term which in commercial judgment or under usage of trade
would serve as a reasonable substitute for the one described may be used,
making any proper allowance for the difference, including the cost of
transporting the goods to or from the other place.

(3) Evidence of a relevant rent prevailing at a time or place or
for a lease term other than the one described in this chapter offered by
one party is not admissible unless and until one party has given the
other party notice the court finds sufficient to prevent unfair surprise.

(4) If the prevailing rent or value of any goods regularly leased
in any established market is in issue, reports in official publications,
trade journals, newspapers or periodicals of general circulation
published as the reports of that market are admissible in evidence. The
circumstances of the preparation of the report may be shown to affect its
weight but not its admissibility. [1989 c.676 §54] (1) If a lessor fails to deliver the
goods in conformity to the lease contract as provided in ORS 72A.5090 or
repudiates the lease contract as provided in ORS 72A.4020, or a lessee
rightfully rejects the goods as provided in ORS 72A.5090 or justifiably
revokes acceptance of the goods as provided in ORS 72A.5170, then with
respect to any goods involved, and with respect to all of the goods if
under an installment lease contract the value of the whole lease contract
is substantially impaired as provided in ORS 72A.5100, the lessor is in
default under the lease contract and the lessee may:

(a) Cancel the lease contract under ORS 72A.5050;

(b) Recover so much of the rent and security as has been paid and
is just under the circumstances;

(c) Cover and recover damages as to all goods affected whether or
not they have been identified to the lease contract under ORS 72A.5180
and 72A.5200, or recover damages for nondelivery under ORS 72A.5190 and
72A.5200; or

(d) Exercise any other rights or pursue any other remedies provided
in the lease contract.

(2) If a lessor fails to deliver the goods in conformity to the
lease contract or repudiates the lease contract, the lessee may also:

(a) If the goods have been identified, recover them under ORS
72A.5220; or

(b) In a proper case, obtain specific performance or replevy the
goods under ORS 72A.5210.

(3) If a lessor is otherwise in default under a lease contract, the
lessee may exercise the rights and pursue the remedies provided in the
lease contract, which may include a right to cancel the lease, and in ORS
72A.5190 (3).

(4) If a lessor has breached a warranty, whether express or
implied, the lessee may recover damages under ORS 72A.5190.

(5) On rightful rejection or justifiable revocation of acceptance,
a lessee has a security interest in goods in the lessee's possession or
control for any rent and security that has been paid and any expenses
reasonably incurred in their inspection, receipt, transportation, care
and custody and may hold those goods and dispose of them in good faith
and in a commercially reasonable manner, subject to ORS 72A.5270.

(6) Subject to the provisions of ORS 72A.4070, a lessee, on
notifying the lessor of the lessee's intention to do so, may deduct all
or any part of the damages resulting from any default under the lease
contract from any part of the rent still due under the same lease
contract. [1989 c.676 §55; 1993 c.646 §10]
(1) Subject to the provisions of ORS 72A.5100 on default in installment
lease contracts, if the goods or the tender or delivery fail in any
respect to conform to the lease contract, the lessee may reject or accept
the goods or accept any commercial unit or units and reject the rest of
the goods.

(2) Rejection of goods is ineffective unless it is within a
reasonable time after tender or delivery of the goods and the lessee
seasonably notifies the lessor. [1989 c.676 §56] (1)
Under an installment lease contract a lessee may reject any delivery that
is nonconforming if the nonconformity substantially impairs the value of
that delivery and cannot be cured or the nonconformity is a defect in the
required documents. However, if the nonconformity does not fall within
subsection (2) of this section and the lessor or the supplier gives
adequate assurance of its cure, the lessee must accept that delivery.

(2) Whenever nonconformity or default with respect to one or more
deliveries substantially impairs the value of the installment lease
contract as a whole there is a default with respect to the whole.
However, the aggrieved party reinstates the installment lease contract as
a whole if the aggrieved party accepts a nonconforming delivery without
seasonably notifying of cancellation or brings an action with respect
only to past deliveries or demands performance as to future deliveries.
[1989 c.676 §57]
(1) Subject to any security interest of a lessee under ORS 72A.5080, if a
lessor or a supplier has no agent or place of business at the market of
rejection, a merchant lessee, after rejection of goods in possession or
control of the merchant lessee, shall follow any reasonable instructions
received from the lessor or the supplier with respect to the goods. In
the absence of those instructions, a merchant lessee shall make
reasonable efforts to sell, lease or otherwise dispose of the goods for
the lessor's account if they threaten to decline in value speedily.
Instructions are not reasonable if on demand indemnity for expenses is
not forthcoming.

(2) If a merchant lessee or any other lessee disposes of goods, the
lessee is entitled to reimbursement either from the lessor or the
supplier or out of the proceeds for reasonable expenses of caring for and
disposing of the goods and, if the expenses include no disposition
commission, to such commission as is usual in the trade, or if there is
none, to a reasonable sum not exceeding 10 percent of the gross proceeds.

(3) In complying with this section or ORS 72A.5120, the lessee is
held only to good faith. Good faith conduct as described in this section
is neither acceptance or conversion nor the basis of an action for
damages.

(4) A purchaser who purchases in good faith from a lessee pursuant
to this section or ORS 72A.5120 takes the goods free of any rights of the
lessor and the supplier even though the lessee fails to comply with one
or more of the requirements of this chapter. [1989 c.676 §58] (1)
Except as otherwise provided in ORS 72A.5110 with respect to goods that
threaten to decline in value speedily and subject to any security
interest of a lessee under ORS 72A.5080:

(a) The lessee, after rejection of goods in the lessee's
possession, shall hold them with reasonable care at the lessor's or the
supplier's disposition for a reasonable time after the lessee's
seasonable notification of rejection; and

(b) If the lessor or the supplier gives no instructions within a
reasonable time after notification of rejection, the lessee may store the
rejected goods for the lessor's or the supplier's account or ship them to
the lessor or the supplier or dispose of them for the lessor's or the
supplier's account with reimbursement in the manner provided in ORS
72A.5110.

(2) If the lessee complies with subsection (1) of this section, the
lessee has no further obligations with regard to goods rightfully
rejected.

(3) Action by the lessee pursuant to subsection (1) of this section
is not acceptance or conversion. [1989 c.676 §59](1) If any tender or delivery by the lessor or the supplier
is rejected because it is nonconforming and the time for performance has
not yet expired, the lessor or the supplier may seasonably notify the
lessee of the lessor's or the supplier's intention to cure and may then
make a conforming delivery within the time provided in the lease contract.

(2) If the lessee rejects a nonconforming tender that the lessor or
the supplier had reasonable grounds to believe would be acceptable with
or without money allowance, the lessor or the supplier may have a further
reasonable time to substitute a conforming tender if the lessor or the
supplier seasonably notifies the lessee. [1989 c.676 §60] (1) In rejecting goods, a
lessee's failure to state a particular defect that is ascertainable by
reasonable inspection precludes the lessee from relying on the defect to
justify rejection or to establish default:

(a) If, stated seasonably, the lessor or the supplier could have
cured it under ORS 72A.5130; or

(b) Between merchants if the lessor or the supplier after rejection
has made a request, in writing, for a full and final written statement of
all defects on which the lessee proposes to rely.

(2) A lessee's failure to reserve rights when paying rent or other
consideration against documents precludes recovery of the payment for
defects apparent on the face of the documents. [1989 c.676 §61] (1) Acceptance of goods occurs after
the lessee has had a reasonable opportunity to inspect the goods and:

(a) The lessee signifies or acts with respect to the goods in a
manner that signifies to the lessor or the supplier that the goods are
conforming or that the lessee will take or retain them in spite of their
nonconformity; or

(b) The lessee fails to make an effective rejection of the goods
under ORS 72A.5090.

(2) Acceptance of a part of any commercial unit is acceptance of
that entire unit. [1989 c.676 §62](1) A lessee must pay rent for any goods accepted
in accordance with the lease contract, with due allowance for goods
rightfully rejected or not delivered.

(2) A lessee's acceptance of goods precludes rejection of the goods
accepted. In the case of a finance lease, if made with knowledge of a
nonconformity, acceptance cannot be revoked because of it. In any other
case, if made with knowledge of a nonconformity, acceptance cannot be
revoked because of it unless the acceptance was on the reasonable
assumption that the nonconformity would be seasonably cured. Acceptance
does not of itself impair any other remedy provided by this chapter or
the lease agreement for nonconformity.

(3) If a tender has been accepted:

(a) Within a reasonable time after the lessee discovers or should
have discovered any default, the lessee shall notify the lessor and the
supplier, if any, or be barred from any remedy against the party not
notified;

(b) Except in the case of a consumer lease, within a reasonable
time after the lessee receives notice of litigation for infringement or
the like, the lessee shall notify the lessor or be barred from any remedy
over for liability established by the litigation; and

(c) The burden is on the lessee to establish any default.

(4) If a lessee is sued for breach of a warranty or other
obligation for which a lessor or a supplier is answerable, the following
apply:

(a) The lessee may give the lessor or the supplier, or both,
written notice of the litigation. If the notice states that the person
notified may come in and defend and that if the person notified does not
do so that person will be bound in any action against that person by the
lessee by any determination of fact common to the two litigations, then
unless the person notified after seasonable receipt of the notice does
come in and defend, that person is so bound.

(b) The lessor or the supplier may demand in writing that the
lessee turn over control of the litigation including settlement if the
claim is one for infringement or the like as provided in ORS 72A.2110 or
else be barred from any remedy over. If the demand states that the lessor
or the supplier agrees to bear all expense and to satisfy any adverse
judgment, then unless the lessee after seasonable receipt of the demand
does turn over control the lessee is so barred.

(5) Subsections (3) and (4) of this section apply to any obligation
of a lessee to hold the lessor or the supplier harmless against
infringement or the like. [1989 c.676 §63; 1993 c.646 §11] (1) A lessee may revoke
acceptance of a lot or commercial unit whose nonconformity substantially
impairs its value to the lessee if the lessee has accepted it:

(a) Except in the case of a finance lease, on the reasonable
assumption that its nonconformity would be cured and it has not been
seasonably cured; or

(b) Without discovery of the nonconformity if the lessee's
acceptance was reasonably induced either by the lessor's assurances or,
except in the case of a finance lease, by the difficulty of discovery
before acceptance.

(2) Except in the case of a finance lease that is not a consumer
lease, a lessee may revoke acceptance of a lot or commercial unit if the
lessor defaults under the lease contract and the default substantially
impairs the value of that lot or commercial unit to the lessee.

(3) If the lease agreement so provides, the lessee may revoke
acceptance of a lot or commercial unit because of other defaults by the
lessor.

(4) Revocation of acceptance must occur within a reasonable time
after the lessee discovers or should have discovered the ground for it
and before any substantial change in condition of the goods which is not
caused by the nonconformity. Revocation is not effective until the lessee
notifies the lessor.

(5) A lessee who so revokes has the same rights and duties with
regard to the goods involved as if the lessee had rejected them. [1989
c.676 §64; 1993 c.646 §12] (1) After a default by a lessor
under the lease contract of the type described in ORS 72A.5080, or, if
agreed, after other default by the lessor, the lessee may cover by making
any purchase or lease of or contract to purchase or lease goods in
substitution for those due from the lessor.

(2) Except as otherwise provided in ORS 72A.5030 with respect to
damages liquidated in the lease agreement or otherwise determined
pursuant to agreement of the parties under ORS 71.1020 and 72A.5030, if a
lessee's cover is by a 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 lessee may recover
from the lessor as damages:

(a) The present value, as of the date of the commencement of the
term of the new lease agreement, of the rent under the new lease
agreement applicable to that period of the new lease term which is
comparable to the then remaining term of the original lease agreement
minus the present value as of the same date of the total rent for the
then remaining lease term of the original lease agreement; and

(b) Any incidental or consequential damages, less expenses saved in
consequence of the lessor's default.

(3) If a lessee's cover is by lease agreement that for any reason
does not qualify for treatment under subsection (2) of this section, or
is by purchase or otherwise, the lessee may recover from the lessor as if
the lessee had elected not to cover and ORS 72A.5190 governs. [1989 c.676
§65; 1993 c.646 §13](1) Except as otherwise
provided in ORS 72A.5030 with respect to damages liquidated in the lease
agreement or otherwise determined pursuant to agreement of the parties
under ORS 71.1020 and 72A.5030, if a lessee elects not to cover or a
lessee elects to cover and the cover is by lease agreement that for any
reason does not qualify for treatment under ORS 72A.5180, or is by
purchase or otherwise, the measure of damages for nondelivery or
repudiation by the lessor or for rejection or revocation of acceptance by
the lessee is the present value, as of the date of the default, of the
then market rent minus the present value as of the same date of the
original rent, computed for the remaining lease term of the original
lease agreement, together with incidental and consequential damages, less
expenses saved in consequence of the lessor's default.

(2) Market rent is to be determined as of the place for tender or,
in cases of rejection after arrival or revocation of acceptance, as of
the place of arrival.

(3) Except as otherwise agreed, if the lessee has accepted goods
and given notification under ORS 72A.5160, the measure of damages for
nonconforming tender or delivery or other default by a lessor is the loss
resulting in the ordinary course of events from the lessor's default as
determined in any manner that is reasonable together with incidental and
consequential damages, less expenses saved in consequence of the lessor's
default.

(4) Except as otherwise agreed, the measure of damages for breach
of warranty is the present value at the time and place of acceptance of
the difference between the value of the use of the goods accepted and the
value if they had been as warranted for the lease term, unless special
circumstances show proximate damages of a different amount, together with
incidental and consequential damages, less expenses saved in consequence
of the lessor's default or breach of warranty. [1989 c.676 §66; 1993
c.646 §14] (1)
Incidental damages resulting from a lessor's default include expenses
reasonably incurred in inspection, receipt, transportation, and care and
custody of goods rightfully rejected or goods the acceptance of which is
justifiably revoked, any commercially reasonable charges, expenses or
commissions in connection with effecting cover and any other reasonable
expense incident to the default.

(2) Consequential damages resulting from a lessor's default include:

(a) Any loss resulting from general or particular requirements and
needs of which the lessor at the time of contracting had reason to know
and which could not reasonably be prevented by cover or otherwise; and

(b) Injury to person or property proximately resulting from any
breach of warranty. [1989 c.676 §67] (1) A
judgment requiring specific performance may be entered if the goods are
unique or in other proper circumstances.

(2) A judgment for specific performance may include any terms and
conditions as to payment of the rent, damages or other relief that the
court considers just.

(3) A lessee has a right of replevin, detinue, sequestration, claim
and delivery or the like for goods identified to the lease contract if
after reasonable effort the lessee is unable to effect cover for those
goods or the circumstances reasonably indicate that the effort will be
unavailing. [1989 c.676 §68; 2003 c.576 §334] (1)
Subject to subsection (2) of this section and even though the goods have
not been shipped, a lessee who has paid a part or all of the rent and
security for goods identified to a lease contract as provided in ORS
72A.2170 on making and keeping good a tender of any unpaid portion of the
rent and security due under the lease contract may recover the goods
identified from the lessor if the lessor becomes insolvent within 10 days
after receipt of the first installment of rent and security.

(2) A lessee acquires the right to recover goods identified to a
lease contract only if they conform to the lease contract. [1989 c.676
§69] (1) If a lessee wrongfully rejects or
revokes acceptance of goods or fails to make a payment when due or
repudiates with respect to a part or the whole, then with respect to any
goods involved, and with respect to all of the goods if under an
installment lease contract the value of the whole lease contract is
substantially impaired as provided under ORS 72A.5100, the lessee is in
default under the lease contract and the lessor may:

(a) Cancel the lease contract as provided in ORS 72A.5050;

(b) Proceed respecting goods not identified to the lease contract
as provided in ORS 72A.5240;

(c) Withhold delivery of the goods and take possession of goods
previously delivered as provided in ORS 72A.5250;

(d) Stop delivery of the goods by any bailee as provided in ORS
72A.5260;

(e) Dispose of the goods and recover damages as provided in ORS
72A.5270, retain the goods and recover damages as provided in ORS
72A.5280, or in a proper case recover rent as provided in ORS 72A.5290; or

(f) Exercise any other rights or pursue any other remedies provided
in the lease contract.

(2) If a lessor does not fully exercise a right or obtain a remedy
to which the lessor is entitled under subsection (1) of this section, the
lessor may recover the loss resulting in the ordinary course of events
from the lessee's default as determined in any reasonable manner,
together with incidental damages, less expenses saved in consequence of
the lessee's default.

(3) If a lessee is otherwise in default under a lease contract, the
lessor may exercise the rights and pursue the remedies provided in the
lease contract, which may include a right to cancel the lease. In
addition, unless otherwise provided in the lease contract:

(a) If the default substantially impairs the value of the lease
contract to the lessor, the lessor may exercise the rights and pursue the
remedies provided in subsection (1) or (2) of this section; or

(b) If the default does not substantially impair the value of the
lease contract to the lessor, the lessor may recover as provided in
subsection (2) of this section. [1989 c.676 §70; 1993 c.646 §15; 1995
c.79 §22] (1) A
lessor aggrieved under ORS 72A.5230 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 as provided in ORS 72A.5270 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. [1989 c.676
§71] (1) If a lessor
discovers the lessee to be insolvent, the lessor may refuse to deliver
the goods.

(2) After a default by the lessee under the lease contract of the
type described in ORS 72A.5230 (1) and (3)(a) or, if agreed, after other
default by the lessee, the lessor has the right to take possession of the
goods. If the lease contract so provides, the lessor may require the
lessee to assemble the goods and make them available to the lessor at a
place to be designated by the lessor which is reasonably convenient to
both parties. Without removal, the lessor may render unusable any goods
employed in trade or business and may dispose of goods on the lessee's
premises as provided in ORS 72A.5270.

(3) The lessor may proceed under subsection (2) of this section
without judicial process if it can be done without breach of the peace or
the lessor may proceed by action. [1989 c.676 §72; 1993 c.646 §16] (1)
A lessor may stop delivery of goods in the possession of a carrier or
other bailee if the lessor discovers the lessee to be insolvent and may
stop delivery of carload, truckload, planeload or larger shipments of
express or freight if the lessee repudiates or fails to make a payment
due before delivery, whether for rent, security or otherwise under the
lease contract, or for any other reason the lessor has a right to
withhold or take possession of the goods.

(2) In pursuing its remedies under subsection (1) of this section,
the lessor may stop delivery until:

(a) Receipt of the goods by the lessee;

(b) Acknowledgment to the lessee by any bailee of the goods, except
a carrier, that the bailee holds the goods for the lessee; or

(c) Such an acknowledgment to the lessee by a carrier via
reshipment or as warehouseman.

(3)(a) To stop delivery, a lessor shall so notify as to enable the
bailee by reasonable diligence to prevent delivery of the goods.

(b) After notification, the bailee shall hold and deliver the goods
according to the directions of the lessor, but the lessor is liable to
the bailee for any ensuing charges or damages.

(c) A carrier who has issued a nonnegotiable bill of lading is not
obliged to obey a notification to stop received from a person other than
the consignor. [1989 c.676 §73] (1) After a default
by a lessee under the lease contract of the type described in ORS
72A.5230 or after the lessor refuses to deliver or takes possession of
goods as provided in ORS 72A.5250 or 72A.5260, 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 as provided in ORS 72A.5040 or otherwise
determined pursuant to agreement of the parties as provided in ORS
71.1020 and 72A.5030, 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, accrued and unpaid
rent as of the date of the commencement of the term of the new lease
agreement, 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 term of the original lease agreement,
and any incidental damages allowed under ORS 72A.5300, less expenses
saved in consequence of the lessee's default.

(3) If the lessor's disposition is by lease agreement that for any
reason does not qualify for treatment under subsection (2) of this
section 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 and ORS
72A.5280 governs.

(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 chapter.

(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 as provided in ORS 72A.5080.
[1989 c.676 §74; 1993 c.646 §17] (1) Except as otherwise
provided with respect to damages liquidated in the lease agreement as
provided in ORS 72A.5040 or otherwise determined pursuant to agreement of
the parties as provided in ORS 71.1020 and 72A.5030, if a lessor elects
to retain the goods or a lessor elects to dispose of the goods and the
disposition is by lease agreement that for any reason does not qualify
for treatment under ORS 72A.5270, or is by sale or otherwise, the lessor
may recover from the lessee as damages for a default of the type
described in ORS 72A.5230, or, if agreed, for other default of the
lessee, accrued and unpaid rent as of the date of default if the lessee
has never taken possession of the goods, or, if the lessee has taken
possession of the goods, as of the date the lessor repossesses the goods
or an earlier date on which the lessee makes a tender of the goods to the
lessor, the present value as of the date determined under this section 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 market rent
at the place where the goods are located computed for the same lease term
and any incidental damages allowed under ORS 72A.5300, less expenses
saved in consequence of the lessee's default.

(2) If the measure of damages provided in subsection (1) of this
section is inadequate to put a lessor in as good a position as
performance would have, the measure of damages is the present value of
the profit, including reasonable overhead, the lessor would have made
from full performance by the lessee, together with any incidental damages
allowed under ORS 72A.5300, due allowance for costs reasonably incurred
and due credit for payments or proceeds of disposition. [1989 c.676 §75;
1993 c.646 §18] (1) After default by the
lessee under the lease contract of the type described in ORS 72A.5230,
or, if agreed after other default by the lessee, if the lessor complies
with subsection (2) of this section, the lessor may recover from the
lessee as damages:

(a) For goods accepted by the lessee and not repossessed by or
tendered to the lessor and for conforming goods lost or damaged within a
commercially reasonable time after risk of loss passes to the lessee as
provided in ORS 72A.2190:

(A) Accrued and unpaid rent as of the date of entry of judgment in
favor of the lessor;

(B) The present value as of the same date of the rent for the then
remaining lease term of the lease agreement; and

(C) Any incidental damages allowed under ORS 72A.5300, less
expenses saved in consequence of the lessee's default; and

(b) For goods identified to the lease contract if the lessor is
unable after reasonable effort to dispose of them at a reasonable price
or the circumstances reasonably indicate that effort will be unavailing,
accrued and unpaid rent as of the date of entry of judgment in favor of
the lessor, the present value as of the same date of the rent for the
then remaining lease term of the lease agreement and any incidental
damages allowed under ORS 72A.5300, less expenses saved in consequence of
the lessee's default.

(2) Except as provided in subsection (3) of this section, the
lessor shall hold for the lessee for the remaining lease term of the
lease agreement any goods that have been identified to the lease contract
and are in the lessor's control.

(3) The lessor may dispose of the goods at any time before
collection of the judgment for damages obtained pursuant to subsection
(1) of this section. If the disposition is before the end of the
remaining lease term of the lease agreement, the lessor's recovery
against the lessee for damages is governed by ORS 72A.5270 or 72A.5280,
and the lessor will cause an appropriate credit to be provided against a
judgment for damages to the extent that the amount of the judgment
exceeds the recovery available pursuant to ORS 72A.5270 or 72A.5280.

(4) Payment of the judgment for damages obtained pursuant to
subsection (1) of this section entitles the lessee to the use and
possession of the goods not then disposed of for the remaining lease term
of and in accordance with the lease agreement.

(5) After a lessee has wrongfully rejected or revoked acceptance of
goods, has failed to pay rent then due or has repudiated as provided in
ORS 72A.4020, a lessor who is held not entitled to rent under this
section must nevertheless be awarded damages for nonacceptance under ORS
72A.5270 and 72A.5280. [1989 c.676 §76; 1993 c.646 §19]In addition to any other recovery permitted by this
chapter or other law, the lessor may recover from the lessee an amount
that will fully compensate the lessor for any loss of or damage to the
lessor's residual interest in the goods caused by the default of the
lessee. [1993 c.646 §21] Incidental damages to an
aggrieved lessor include any commercially reasonable charges, expenses or
commissions incurred in stopping delivery, in the transportation, care
and custody of goods after the lessee's default, in connection with
return or disposition of the goods, or otherwise resulting from the
default. [1989 c.676 §77] (1) If
a third party so deals with goods that have been identified to a lease
contract as to cause actionable injury to a party to the lease contract,
the lessor has a right of action against the third party and the lessee
also has a right of action against the third party if the lessee:

(a) Has a security interest in the goods;

(b) Has an insurable interest in the goods; or

(c) Bears the risk of loss under the lease contract or has since
the injury assumed that risk as against the lessor and the goods have
been converted or destroyed.

(2) If at the time of the injury the party plaintiff did not bear
the risk of loss as against the other party to the lease contract and
there is no arrangement between them for disposition of the recovery, the
plaintiff's suit or settlement, subject to the plaintiff's own interest,
is as a fiduciary for the other party to the lease contract.

(3) Either party with the consent of the other may sue for the
benefit of whom it may concern. [1989 c.676 §78]

_______________

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