California Commercial Code

§ 10405

COM § 10405 Effective Jul 15, 1991Div. 10 · Ch. 4

Statute text

Subject to Section 10404 on substituted performance, the following rules apply:

(1)Delay in delivery or nondelivery in whole or in part by a lessor or a supplier who complies with paragraphs (2) and (3) is not a default under the lease contract if performance as agreed has been made impracticable by the occurrence of a contingency the nonoccurrence of which was a basic assumption on which the lease contract was made or by compliance in good faith with any applicable foreign or domestic governmental regulation or order, whether or not the regulation or order later proves to be invalid.

(2)If the causes mentioned in paragraph (1) affect only part of the lessor’s or the supplier’s capacity to perform, he or she shall allocate production and deliveries among his or her customers but at his or her option may include regular customers not then under contract for sale or lease as well as his or her own requirements for further manufacture. He or she may so allocate in any manner that is fair and reasonable.

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Legislative history

Amended by Stats. 1991, Ch. 111, Sec. 37. Effective July 15, 1991.