Section 2-A-516. Effect of Acceptance of Goods; Notice of Default;

Burden of Establishing Default After Acceptance;

Notice of Claim or Litigation to Person Answerable

Over.

(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, other than a consumer lease in
which the supplier assisted in the preparation of the lease contract or
participated in negotiating the terms of the lease contract with the
lessor, 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 Article 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 (Section 2-A-211) 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 over 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; and

(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

(Section 2-A-211) 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) apply to any obligation of a lessee to
hold the lessor or the supplier harmless against infringement or the
like (Section 2-A-211).