(1) If a lessor fails to deliver the goods in conformity to the lease contract (§ 2A-509) or repudiates the lease contract (§ 2A-402), or a lessee rightfully rejects the goods (§ 2A-509) or justifiably revokes acceptance of the goods (§ 2A-517), 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 (§ 2A-510), the lessor is in default under the lease contract and the lessee may:
(a) Cancel the lease contract (§ 2A-505(1));
(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 (§§ 2A-518 and 2A-520), or recover damages for nondelivery (§§ 2A-519 and 2A-520);
(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 (§ 2A-522); or
(b) In a proper case, obtain specific performance or replevy the goods (§ 2A-521).
(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 § 2A-519(3).
(4) If a lessor has breached a warranty, whether express or implied, the lessee may recover damages (§ 2A-519(4)).
(5) Subject to the provisions of § 2A-407, 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.