<html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 57A-2A-518 - Cover--Substitute goods. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2073346Normal { margin-top: 0; margin-bottom: 0; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2073346SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2073346CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2073346Normal-000000 { margin-top: 0; margin-bottom: 0; text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-left: 0; margin-right: 0; } span.s2073346DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } p.s2073346Normal-000001 { margin-top: 0; margin-bottom: 0; margin-left: 0.70in; text-indent: -0.45in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-right: 0; } span.s2073346000002 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2073346SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2073346SCL-000003 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } body { text-decoration-skip-ink: none; } </style></head><body><div><p dir="ltr" class="s2073346Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=57A-2A-518"><span class="s2073346SENU">57A-2A-518</span></a><span xml:space="preserve" class="s2073346SENU">. </span><span class="s2073346CL">Cover--Substitute goods.</span></p><p dir="ltr" class="s2073346Normal-000000"><span class="s2073346DefaultParagraphFont">(1) After default by a lessor under the lease contract (§ 57A-2A-508(1)), the lessee may cover by making any purchase or lease of or contract to purchase or lease goods in substitution for those due from the lessor.</span></p><p dir="ltr" class="s2073346Normal-000001"><span xml:space="preserve" class="s2073346DefaultParagraphFont">(2)    Except as otherwise provided with respect to damages liquidated in the lease agreement (§ </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=57A-2A-504"><span class="s2073346DefaultParagraphFont">57A-2A-504</span></a><span xml:space="preserve" class="s2073346DefaultParagraphFont">) or otherwise determined by agreement of the parties (§§ </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=57A-1-302"><span class="s2073346DefaultParagraphFont">57A-1-302</span></a><span xml:space="preserve" class="s2073346DefaultParagraphFont"> and </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=57A-2A-503"><span class="s2073346DefaultParagraphFont">57A-2A-503</span></a><span class="s2073346DefaultParagraphFont">), if a lessee's cover is by lease agreement substantially similar to the original lease agreement and the lease agreement is made in good faith and in a commercially reasonable manner, the lessee may recover from the lessor as damages (a) the present value, as of the date of the commencement of the new lease agreement, of the difference between the total rent for the lease term of the new lease agreement and the total rent for the then remaining lease term of the original lease agreement and (b) any incidental or consequential damages less expenses saved in consequence of the lessor's default.</span></p><p dir="ltr" class="s2073346Normal-000001"><span xml:space="preserve" class="s2073346DefaultParagraphFont">(3)    If the lessee's cover is by lease agreement that qualifies for treatment under subsection (2) of this section, the lessee may elect to proceed under subsection (2) of this section or § </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=57A-2A-519"><span class="s2073346DefaultParagraphFont">57A-2A-519</span></a><span xml:space="preserve" class="s2073346DefaultParagraphFont">. If a lessee's cover is by lease agreement that for any reason does not qualify for treatment under subsection (2) of this section, or is by purchase or otherwise, the lessee may recover from the lessor under § </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=57A-2A-519"><span class="s2073346DefaultParagraphFont">57A-2A-519</span></a><span xml:space="preserve" class="s2073346DefaultParagraphFont"> as if the lessee had elected not to cover.</span></p><p dir="ltr" class="s2073346Normal"><span xml:space="preserve" class="s2073346000002"> </span></p><p dir="ltr" class="s2073346Normal"><span class="s2073346SCL">Source:</span><span xml:space="preserve" class="s2073346SCL-000003"> SL 1989, ch 419, § 1; SL 1990, ch 390, § 20; SL 2008, ch 259, § 31.</span></p></div></body></html>