(2A-511) Merchant lessee's duties as to rightfully rejected goods
N.D. Cent. Code § 41-02.1-59
in effect41-02.1-59. (2A-511) Merchant lessee's duties as to rightfully rejected goods
1. Subject to any security interest of a lessee (subsection 5 of section 41-02.1-56), if a
lessor or a supplier has no agent or place of business at the market of rejection, a
merchant lessee, after rejection of goods in the merchant lessee's possession or
control, shall follow any reasonable instructions received from the lessor or the
supplier with respect to the goods. In the absence of those instructions, a merchant
lessee shall make reasonable efforts to sell, lease, or otherwise dispose of the goods
for the lessor's account if they threaten to decline in value speedily. Instructions are not
reasonable if on demand indemnity for expenses is not forthcoming.
2. If a merchant lessee or any other lessee (section 41-02.1-60) disposes of goods, the
lessee is entitled to reimbursement either from the lessor or the supplier or out of the
proceeds for reasonable expenses of caring for and disposing of the goods and, if the
expenses include no disposition commission, to such commission as is usual in the
trade, or if there is none, to a reasonable sum not exceeding ten percent of the gross
proceeds.
3. In complying with this section or section 41-02.1-60, the lessee is held only to good
faith. Good-faith conduct hereunder is neither acceptance or conversion nor the basis
of an action for damages.
4. A purchaser who purchases in good faith from a lessee under this section or section
41-02.1-60 takes the goods free of any rights of the lessor and the supplier even
though the lessee fails to comply with one or more of the requirements of this chapter.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://ndlegis.gov/cencode/t41c02-1.pdf#nameddest=41-02p1-59Fetched: 10/16/2026