DefaultIn General
Section § 10501
This section outlines the rules for determining if either party is in default under a lease agreement. If someone is in default, the other party can enforce their rights as described in this law and the contract itself. They can go to court, use self-help, or try other methods like arbitration. The available remedies add up unless specifically limited by other parts of the law or the lease. If the lease involves both real estate and goods, enforcement can be based on either type following applicable rules; if dealing with both, real estate rules will guide the enforcement.
Section § 10502
In general, if either the person who rents (lessee) or the person who rents out (lessor) is not following the lease agreement, the other side doesn't have to give them a heads-up or warning before taking action, unless the lease or other laws say otherwise.
Section § 10503
This section says that lease agreements can have their own rules about what happens if someone doesn't follow the terms, in addition to the standard rules. You don't have to use the remedies in the lease unless the lease explicitly says that’s the only option. If the agreed-upon remedy doesn't work or is unfair, other solutions can be used. Damages that arise from breaking the lease can be limited or excluded unless that's unfair—but it’s often seen as unfair if it affects personal injury cases with consumer goods. Also, any separate promises related to the lease are not affected by this division.
Section § 10504
This section explains how damages can be settled in a lease agreement if one party fails to meet their obligations, such as a default or other issues. It states that damages may be predetermined in the lease, following certain legal standards. If these terms are not followed, alternative remedies are available. It also covers situations where a lessee, the one renting, may get some money back if the lessor, the one leasing, stops delivering goods due to a default. However, this refund may be reduced by damages the lessor can claim or benefits the lessee received through the lease.
Section § 10505
If a lease gets canceled, both parties are freed from their remaining duties, but past issues or actions still matter, and the person canceling can still seek remedies for defaults. If a lease ends, past issues or actions still count, even though future obligations are no longer required. Saying a lease is canceled or rescinded doesn't mean you can't claim damages for past problems. If there was fraud or misrepresentation, all usual remedies for defaults are still available. Trying to annul a lease, or rejecting or returning goods, doesn't stop you from seeking damages or any other remedies.
Section § 10506
This law covers how long you have to start a legal action if there's a default or breach involving a lease contract. Generally, you have four years to take action after you realize there's a problem. For non-consumer leases, the contract can shorten this period to no less than one year. If your first action ends with an option to file another one, you can take this second action within six months, even if the original time period has already passed, as long as the first case wasn't stopped voluntarily or due to inactivity. This section doesn’t change rules about pausing time limits and doesn’t apply to issues that happened before this rule was in place.
Section § 10507
This law explains how to determine damages based on the market rent of leased goods when a lease agreement is terminated. It starts with looking at the usual rent for the same type of goods for the same length of time as the original lease. If that exact rent isn't available, you can use rent from a different time, place, or lease length if it's a reasonable substitute. You must notify the other party if you plan to use different rent evidence. Reports from recognized publications about rental markets are allowed as evidence but their credibility can be challenged based on how they were prepared.