1. (a) 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. (b) Subject to the provisions of this article on the effect of default on risk of loss (§ 28:2A-220), if risk of loss is to pass to the lessee and the time of passage is not stated, the following rules apply:

   1. (1) If the lease contract requires or authorizes the goods to be shipped by carrier

      1. (A) 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
      2. (B) 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.
   2. (2) 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.
   3. (3) In any case not within paragraph (1) or (2) 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.

Uniform Commercial Code Comment

“Supplier”. Section 2A-103(1)(x).

“Rights”. Section 1-201(36).

“Receipt”. Section 2-103(1)(c).

“Merchant”. Section 2-104(1).

“Lessor”. Section 2A-103(1)(p).

“Lessee”. Section 2A-103(1)(n).

“Lease contract”. Section 2A-103(1)(l).

“Goods”. Section 2A-103(1)(h).

“Finance lease”. Section 2A-103(1)(g).

Definitional Cross References: “Delivery”. Section 1-201(14).

Cross References:Sections 2-509(1), 2-509(2) and 2-509(4).

Purposes: Subsection (1) states rules related to retention or passage of risk of loss consistent with current practice in lease transactions. The provisions of subsection (4) of Section 2-509 are not incorporated as they are not necessary. This section does not deal with responsibility for loss caused by the wrongful act of either the lesser or the lessee.

Changes: Subsection (1) is new. The introduction to subsection (2) is new, but subparagraph (a) incorporates the provisions of Section 2-509(1); subparagraph (b) incorporates the provisions of Section 2-509(2) only in part, reflecting current practice in lease transactions.

Uniform Statutory Source:Section 2-509(1) through (3).

History

July 22, 1992, D.C. Law 9-128, § 2(b), 39 DCR 3830

Prior Codifications

1981 Ed., § 28:2A-219.

Section References

This section is referenced in § 28:2A-221 and § 28:2A-529.