(1) A term providing that one party or his successor in interest may accelerate payment of performance or require collateral or additional collateral "at will" or "when he deems himself insecure" or in words of similar import must be construed to mean that he has power to do so only if he in good faith believes that the prospect of payment or performance is impaired.
(2) With respect to a consumer lease, the burden of establishing good faith under Subsection (1) is on the party who exercised the power; otherwise the burden of establishing lack of good faith is on the party against whom the power has been exercised.
History: 1978 Comp., § 55-2A-109, enacted by Laws 1992, ch. 114, § 16.
ANNOTATIONSOFFICIAL COMMENTS
UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.
Uniform Statutory Source. — Section 1-208 [55-1-208 NMSA 1978] and Unif. Consumer Credit Code § 5.109(2), 7A U.L.A. 171 (1974).
Purposes. — Subsection (1) reflects modest changes in style to the provisions of the first sentence of Section 1-208 [55-1-208 NMSA 1978].
Subsection (2), however, reflects a significant change in the provisions of the second sentence of Section 1-208 [55-1-208 NMSA 1978] by creating a new rule with respect to a consumer lease. A lease provision allowing acceleration at the will of the lessor or when the lessor deems itself insecure is of critical importance to the lessee. In a consumer lease it is a provision that is not usually agreed to by the parties but is usually mandated by the lessor. Therefore, where its invocation depends not on specific criteria but on the discretion of the lessor, its use should be regulated to prevent abuse. Subsection (1) imposes a duty of good faith upon its exercises. Subsection (2) shifts the burden of establishing good faith to the lessor in the case of a consumer lease, but not otherwise.
Cross Reference. — Section 1-208 [55-1-208 NMSA 1978].
"Burden of establishing". Section 1-201(8) [55-1-201 NMSA 1978].
"Consumer lease". Section 2A-103(1)(e) [55-2A-103 NMSA 1978].
"Good faith". Sections 1-201(19) [55-1-201 NMSA 1978] and 2-103(1)(b) [55-2-103 NMSA 1978].
"Party". Section 1-201(29) [55-1-201 NMSA 1978].
"Term". Section 1-201(42) [55-1-201 NMSA 1978].
Effective dates. — Laws 1992, ch. 114, § 238 made Laws 1992, ch. 114, § 16 effective July 1, 1992.