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(810 ILCS 5/Art.
2A Pt. 5 Sub. C heading)
C.
Default by Lessee
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(810 ILCS 5/2A-523) (from Ch. 26,
par. 2A-523)
Sec. 2A-523. Lessor's remedies.
(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 (Section 2A-510),
the lessee is in default under the lease contract and the lessor
may:
(a) cancel
the lease contract (Section 2A-505(1));
(b) proceed
respecting goods not identified to the
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lease contract (Section 2A-524);
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(c)
withhold delivery of the goods and take
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possession of goods previously delivered
(Section 2A-525);
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(d)
stop delivery of the goods by any bailee
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(e)
dispose of the goods and recover damages
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(Section 2A-527), or retain the
goods and recover damages (Section 2A-528),
or in a proper case recover rent (Section 2A-529);
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(f)
exercise any other rights or pursue any other
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remedies provided
in the lease contract.
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(2) If a lessor
does not fully exercise a right or obtain a remedy to which
the lessor is entitled under subsection (1), 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
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of the lease contract to the lessor,
the lessor may exercise the rights and pursue the
remedies provided in subsections (1) or (2); or
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(b)
if the default does not substantially impair the
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value of
the lease contract to the lessor, the lessor may
recover as provided in subsection (2).
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(Source: P.A. 87-493.)
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(810 ILCS 5/2A-524) (from Ch. 26,
par. 2A-524)
Sec. 2A-524. Lessor's right
to identify goods to lease contract.
(1) A lessor aggrieved under Section
2A-523(1) may:
(a) identify
to the lease contract conforming goods
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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
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(b)
dispose of goods (Section 2A-527(1)) that
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demonstrably have
been intended for the particular lease contract
even though those goods are unfinished.
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(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.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-525) (from Ch. 26,
par. 2A-525)
Sec. 2A-525. Lessor's right
to possession of goods.
(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 Section 2A-523(1) or 2A-523(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 (Section
2A-527).
(3) The lessor may proceed under
subsection (2) without judicial process if it can be done without
breach of the peace or the lessor may proceed by action.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-526) (from Ch. 26,
par. 2A-526)
Sec. 2A-526. Lessor's stoppage
of delivery in transit or otherwise.
(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), the lessor may stop delivery until:
(a) receipt
of the goods by the lessee;
(b) acknowledgment
to the lessee by any bailee of
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the goods, except a carrier, that the
bailee holds the goods for the lessee; or
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(c)
such an acknowledgment to the lessee by a
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carrier via
reshipment or as warehouseman.
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(3) (a) To stop
delivery, a lessor shall so notify as to
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enable the
bailee by reasonable diligence to prevent delivery
of the goods.
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(b)
After notification, the bailee shall hold and
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deliver the
goods according to the directions of the lessor,
but the lessor is liable to the bailee for any
ensuing charges or damages.
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(c)
A carrier who has issued a nonnegotiable bill of
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lading is
not obliged to obey a notification to stop received
from a person other than the consignor.
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(Source: P.A. 87-493.)
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(810 ILCS 5/2A-527) (from Ch. 26,
par. 2A-527)
Sec. 2A-527. Lessor's rights
to dispose of goods.
(1) After a default by a lessee
under the lease contract of the type described in Section 2A-523(1) or 2A-523(3)(a) or after the lessor refuses
to deliver or takes possession of goods (Section 2A-525
or 2A-526), 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 (Section
2A-504) or otherwise determined pursuant to agreement of
the parties (Sections 1-102(3) and 2A-503), 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 (i) accrued and unpaid
rent as of the date of the commencement of the term of the new
lease agreement, (ii) 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 (iii) any
incidental damages allowed under Section 2A-530, 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), 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 Section 2A-528 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 Article.
(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 (Section 2A-508(5)).
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-528) (from Ch. 26,
par. 2A-528)
Sec. 2A-528. Lessor's damages
for nonacceptance, failure to pay, repudiation, or other default.
(1) Except as otherwise provided
with respect to damages liquidated in the lease agreement (Section
2A-504) or otherwise determined pursuant to agreement of
the parties (Sections 1-102(3) and 2A-503), 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 Section 2A-527(2),
or is by sale or otherwise, the lessor may recover from the lessee
as damages for a default of the type described in Section 2A-523(1)
or 2A-523(3)(a) or, if agreed, for other default of the
lessee, (i) 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, (ii) the
present value as of the date determined under clause (i) 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 (iii) any incidental damages allowed
under Section 2A-530, less expenses saved in consequence
of the lessee's default.
(2) If the measure of damages provided
in subsection (1) 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 Section 2A-530,
due allowance for costs reasonably incurred and due credit for
payments or proceeds of disposition.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-529) (from Ch. 26,
par. 2A-529)
Sec. 2A-529. Lessor's action
for the rent.
(1) After default by the lessee
under the lease contract of the type described in Section 2A-523(1)
or 2A-523(3)(a) or, if agreed, after other default by the
lessee, if the lessor complies with subsection (2), the lessor
may recover from the lessee as damages:
(a) for
goods accepted by the lessee and not
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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 (Section 2A-219), (i)
accrued and unpaid rent as of the date of entry
of judgment in favor of the lessor, (ii) the present
value as of the same date of the rent for the then
remaining lease term of the lease agreement, and
(iii) any incidental damages allowed under Section
2A-530, less expenses saved in consequence
of the lessee's default; and
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(b) for goods
identified to the lease contract if the
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lessor is unable after reasonable effort
to dispose of them at a reasonable price or the
circumstances reasonably indicate that effort will
be unavailing, (i) accrued and unpaid rent as of
the date of entry of judgment in favor of the lessor,
(ii) the present value as of the same date of the
rent for the then remaining lease term of the lease
agreement, and (iii) any incidental damages allowed
under Section 2A-530, less expenses saved
in consequence of the lessee's default.
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(2) Except as
provided in subsection (3), 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). 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
Section 2A-527 or 2A-528, 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 Section 2A-527 or 2A-528.
(4) Payment of the judgment for
damages obtained pursuant to subsection (1) 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 (Section 2A-402), a lessor who
is held not entitled to rent under this Section must nevertheless
be awarded damages for nonacceptance under Sections 2A-527
and 2A-528.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-530) (from Ch. 26,
par. 2A-530)
Sec. 2A-530. Lessor's incidental
damages. 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.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-531) (from Ch. 26,
par. 2A-531)
Sec. 2A-531. Standing to
sue third parties for injury to goods.
(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 (a) the lessor
has a right of action against the third party, and (b) the lessee
also has a right of action against the third party if the lessee:
(i) has
a security interest in the goods;
(ii) has
an insurable interest in the goods; or
(iii) bears
the risk of loss under the lease
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contract or
has since the injury assumed that risk as against
the lessor and the goods have been converted or
destroyed.
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(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, his or her suit or settlement, subject
to his or her 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.
(Source: P.A. 87-493.)
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(810 ILCS 5/2A-532) (from Ch. 26,
par. 2A-532)
Sec. 2A-532. Lessor's rights
to residual interest. In addition to any other recovery permitted
by this Article 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.
(Source: P.A. 87-493.)
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