(1) 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) Subject to the provisions of this article on the effect of default on risk of loss (Section 55-2A-220 NMSA 1978), if risk of loss is to pass to the lessee and the time of passage is not stated, the following rules apply:
(a) if the lease contract requires or authorizes the goods to be shipped by carrier:
(i) 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
(ii) 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;
(b) 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; and
(c) in any case not within Paragraph (a) or (b), 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.
History: 1978 Comp., § 55-2A-219, enacted by Laws 1992, ch. 114, § 35.
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 2-509(1) through (3) [55-2-509 NMSA 1978].
Changes: — Subsection (1) is new. The introduction to subsection (2) is new, but subparagraph (a) incorporates the provisions of Section 2-509(1) [55-2-509 NMSA 1978]; subparagraph (b) incorporates the provisions of Section 2-509(2) [55-2-509 NMSA 1978] only in part, reflecting current practice in lease transactions.
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 [55-2-509 NMSA 1978] 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.
Cross References: — Sections 2-509(1), 2-509(2) and 2-509(4) [55-2-509 NMSA 1978].
"Delivery". Section 1-201(14) [55-1-201 NMSA 1978].
"Finance lease". Section 2A-103(1)(g) [55-2A-103 NMSA 1978].
"Goods". Section 2A-103(1)(h) [55-2A-103 NMSA 1978].
"Lease contract". Section 2A-103(1)(l) [55-2A-103 NMSA 1978].
"Lessee". Section 2A-103(1)(n) [55-2A-103 NMSA 1978].
"Lessor". Section 2A-103(1)(p) [55-2A-103 NMSA 1978].
"Merchant". Section 2-104(1) [55-2-104 NMSA 1978].
"Receipt". Section 2-103(1)(c) [55-2-103 NMSA 1978].
"Rights". Section 1-201(36) [55-1-201 NMSA 1978].
"Supplier". Section 2A-103(1)(x) [55-2A-103 NMSA 1978].
Effective dates. — Laws 1992, ch. 114, § 238 made Laws 1992, ch. 114, § 35 effective July 1, 1992.