California Commercial Code

§ 10218

COM § 10218 Effective Jul 15, 1991Div. 10 · Ch. 2

Statute text

(a)A lessee obtains an insurable interest when existing goods are identified to the lease contract even though the goods identified are nonconforming and the lessee has an option to reject them.

(b)If a lessee has an insurable interest only by reason of the lessor’s identification of the goods, the lessor, until default or insolvency or notification to the lessee that identification is final, may substitute other goods for those identified.

(c)Notwithstanding a lessee’s insurable interest under subdivisions (a) and (b), the lessor retains an insurable interest until an option to buy has been exercised by the lessee and risk of loss has passed to the lessee.

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Legislative history

Amended by Stats. 1991, Ch. 111, Sec. 20. Effective July 15, 1991.