Chapter 743aa - Consumer Leases

Sec. 42-390. Short title: Consumer Leases Act. Sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, may be cited as the Consumer Leases Act.

(P.A. 02-81, S. 1; P.A. 09-134, S. 2.)

History: P.A. 02-81 effective July 1, 2003; P.A. 09-134 changed short title from “Uniform Consumer Leases Act” to “Consumer Leases Act”.

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Sec. 42-391. Definitions. (a) In sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive:

(1) “Conspicuous”, with reference to a provision or statement, means so written, displayed or presented that a reasonable person against which it is to operate should have noticed it. Whether a provision or statement is conspicuous is a decision for the court. Conspicuous provisions or statements include the following:

(A) A heading in capitals equal in size to or greater in size than the surrounding text, or in contrasting type, font or color to the surrounding text of the same or lesser size; and

(B) Language in the body of a record or display in larger type than the surrounding text, or in contrasting type, font or color to the surrounding text of the same size, or set off from surrounding text of the same size by symbols or other marks that call attention to the language.

(2) “Consumer lease” means a lease in which:

(A) The lessee is obligated for a term of more than four months and for a total contractual obligation of one hundred fifty thousand dollars or less, excluding residual value, payments for options to renew or purchase and payments to persons other than the holder, whether or not the lessee has the option to purchase or otherwise become the owner of the goods at the expiration of the lease; and

(B) When the lease is consummated, the goods are intended by the lessee primarily for personal, family or household purposes.

(3) “Federal Consumer Leasing Act” means Chapter 5 of Title I of the Consumer Credit Protection Act, 15 USC Sections 1667 to 1667f, inclusive, as amended. The term includes regulations issued by the Board of Governors of the Federal Reserve System or the Bureau of Consumer Financial Protection pursuant to that act, Regulation M, 12 CFR Part 213, as amended.

(4) “Good faith” means honesty in fact and the observance of reasonable commercial standards of fair dealing.

(5) “Goods” means all things that are movable at the time of identification to a consumer lease, or are fixtures. The term does not include money, documents, letters of credit, letter-of-credit rights, instruments, investment property, accounts, chattel paper, deposit accounts, general intangibles or minerals or the like, including oil and gas, before extraction.

(6) “Guarantor” means an individual who becomes obligated to perform as an additional obligor under a consumer lease because the original lessee either does not meet the lessor's credit standards or is in default under the lease. The term does not include:

(A) An individual who agrees or requests to become obligated as a colessee; or

(B) An assignor of a consumer lease.

(7) “Holder” means a lessor or, if the lessor's interest is assigned, the assignee for the period of the assignee's ownership of the interest.

(8) “Lease” means a transfer of the right to possession and use of goods for a period in return for consideration. The term does not include a sale on approval, a sale or return or another sale, or the retention or creation of a security interest. The term includes a sublease.

(9) “Lessee” means an individual who acquires, applies for, or is offered the right to possession and use of goods under a consumer lease. The term includes a legal representative of, fiduciary for or successor in interest to, an individual who is a lessee, but does not include a guarantor on a consumer lease.

(10) “Lessor” means a person that transfers the right to possession and use of goods under a consumer lease.

(11) “Motor vehicle” means a vehicle required by law to be registered under section 14-12.

(12) “Open-end consumer lease” means a consumer lease in which the lessee's liability at the expiration of the lease is based on the difference between the residual value and the realized value of the leased goods.

(13) “Realized value” means a valuation of the goods at the time the holder assesses liability on the lessee in connection with termination of the lease, as determined under section 42-420.

(14) “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

(15) “Sign” means:

(A) To execute or adopt a tangible symbol with the present intent to authenticate a record; or

(B) To attach or logically associate an electronic symbol, sound or process to or with a record with the present intent to authenticate a record.

(16) “State” means a State of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands or any territory or insular possession subject to the jurisdiction of the United States.

(b) The following terms used in sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, have the meanings ascribed in the Uniform Commercial Code:

“Accession”. Section 42a-9-102(a).

“Agreement”. Section 42a-1-201(b).

“Contract”. Section 42a-1-201(b).

“Investment property”. Section 42a-9-102(a).

“Money”. Section 42a-1-201(b).

“Person”. Section 42a-1-201(b).

“Person related to”. Section 42a-9-102(a).

“Security interest”. Section 42a-1-201(b).

“Send”. Section 42a-1-201(b).

(c) The following terms used in sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, have the meanings ascribed in the federal Consumer Leasing Act:

(1) “Adjusted capitalized cost”;

(2) “Capitalized cost reduction”;

(3) “Gross capitalized cost”;

(4) “Rent charge”; and

(5) “Residual value”.

(P.A. 02-81, S. 2; P.A. 05-109, S. 53; P.A. 11-110, S. 12.)

History: P.A. 02-81 effective July 1, 2003; P.A. 05-109 amended Subsec. (b) by replacing references to various subdivisions of Sec. 42a-1-201 with “Section 42a-1-201(b)”; P.A. 11-110 amended Subsec. (a)(3) to add reference to Bureau of Consumer Financial Protection, effective July 21, 2011.

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Sec. 42-392. Time of consummation. Expiration. Termination. (a) Consummation of a consumer lease occurs when the lessee signs a record evidencing the lessee's contractual obligation under the lease. A lessee may consummate a consumer lease even if it is subject to subsequent credit or other approval by the lessor or an assignee of the lessor.

(b) Expiration of a consumer lease occurs at the scheduled end of the period covered by the lease.

(c) Termination of a consumer lease occurs when the lessee's right to continued possession and use of the goods ends by virtue of:

(1) Expiration of the lease;

(2) Election by one of the parties to terminate before expiration, as provided in the lease; or

(3) Agreement of the parties.

(P.A. 02-81, S. 3.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-393. Scope. Exclusions. Sale incident to lease. (a) Except as otherwise provided in subsections (b) to (e), inclusive, of this section, sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, apply to a consumer lease.

(b) Sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, do not apply to a consumer lease unless the lessor has leased goods under a consumer lease more than five times in the preceding calendar year or more than five times in the current calendar year.

(1) A safe deposit box;

(2) Goods incidental to a lease of real property under which the lessee: (A) Has no liability for the value of the goods at the end of the lease period except for abnormal wear and use; and (B) has no option to purchase the goods; or

(3) Goods incidental to a contract for the sale of goods or services.

(d) If a transaction that is predominantly a consumer lease includes an incidental sale of goods, services or other benefits, including accessories, insurance, an extended warranty, a maintenance agreement or a service contract, the incidental sale is not subject to sections 36a-770 to 36a-788, inclusive, 42-100b, 42-100c and 42-125aa to 42-125cc, inclusive.

(e) A provision in a consumer lease for payment of governmental, license or registration fees; taxes related to the lease; or an amount necessary to discharge a security interest in, a lien on, or a debt with respect to, property traded in, or to satisfy an obligation owed on a previous lease, does not make the payment subject to sections 36a-555 to 36a-573, inclusive, 36a-675 to 36a-685, inclusive, 36a-770 to 36a-788, inclusive, 42-100b, 42-100c and 42-125aa to 42-125cc, inclusive.

(P.A. 02-81, S. 4.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-394. Characterization of lease. Applicability by agreement. (a) A consumer lease may not be deemed a credit sale, loan or security interest to make the transaction subject to coverage by other law in lieu of sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive.

(b) The parties to a lease that is not subject to sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, may agree in the lease, or in a contemporaneous record, that sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, apply to the lease.

(c) The parties to a consumer lease may not agree that the transaction is governed by other law in lieu of sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive.

(P.A. 02-81, S. 5.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-395. Supplemental provisions and principles of law applicable. Limitations. Restrictions. The provisions of sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, are supplemented by other applicable statutory provisions and by general principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy and other validating or invalidating cause, unless those provisions or principles are displaced by or inconsistent with the provisions of sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive. Nothing in sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, shall be construed to limit or restrict in any way any rights or remedies which may be available to a lessee or person under any other statutory provisions or under general principles of law and equity.

(P.A. 02-81, S. 6.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-396. Waiver. Agreement to forego rights in settlement of claim. (a) Except as otherwise permitted by sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, a lessee may waive or agree to forego rights, benefits or remedies under sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, only in settling a dispute or collection claim.

(b) A settlement in which a lessee agrees to forego a right, benefit or remedy under sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, is invalid if the court finds that the settlement was unconscionable when made.

(P.A. 02-81, S. 7.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-397. Limitation on choice of law and venue. (a) The parties to a consumer lease may not choose the law of a jurisdiction unless it is a jurisdiction in which:

(1) The lessee principally resides when the lease is consummated;

(2) The lessee will principally reside within thirty days after the lease is consummated;

(3) The leased goods are to be used; or

(4) Subject to subsection (b) of this section, the leased goods are physically received by the lessee.

(b) If the law chosen by the parties to a consumer lease under subdivision (4) of subsection (a) of this section is the law of a jurisdiction other than this state and the holder acts or initiates an action in this state to enforce rights arising from the lease against a lessee who is a resident of this state, the following rules apply:

(1) The holder's act or action is subject to sections 42-394, 42-395, 42-396, 42-398, and 42-399 and, except for a disclosure that would have been required by sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, to be made before the holder's act or action, to sections 42-408 to 42-415, inclusive, and 42-418 to 42-423, inclusive.

(2) The holder's act or action is subject to sections 42-424 to 42-431, inclusive, if the holder's act or action violates a provision of sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, made applicable by this subsection.

(c) Notwithstanding any provision in a consumer lease, an action by a holder against a lessee to enforce the holder's rights under the lease must be brought in the venue of the lessee's residence.

(d) Notwithstanding any provision in a consumer lease, a lessee may maintain an action against a holder in any judicial forum that otherwise has jurisdiction over the holder.

(P.A. 02-81, S. 8.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-398. Obligation of good faith. Every contract subject to, or duty imposed by, sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, imposes an obligation of good faith in its performance or enforcement.

(P.A. 02-81, S. 9.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-399. Unconscionability. (a) If the court as a matter of law finds that a consumer lease or any provision of the lease was unconscionable when the lease was consummated, the court may refuse to enforce the lease, enforce the remainder of the lease without the unconscionable provision or so limit the application of an unconscionable provision as to avoid an unconscionable result.

(b) If the court as a matter of law finds that a consumer lease or any provision of a consumer lease was induced by unconscionable conduct or that unconscionable conduct has occurred in the collection of a claim arising from the lease, the court may grant appropriate relief.

(c) Before making a finding of unconscionability under subsection (a) or (b) of this section, the court shall afford the parties a reasonable opportunity to present evidence as to the setting, purpose and effect of the consumer lease, the provision or the conduct.

(d) In an action in which the lessee claims unconscionability with respect to a consumer lease, the following rules apply:

(1) If the court finds unconscionability under subsection (a) or (b) of this section, the court shall award reasonable attorney's fees to the lessee.

(2) In determining the reasonableness of attorney's fees, the amount of the recovery on behalf of the claimant under subsection (a) or (b) of this section is not controlling.

(P.A. 02-81, S. 10.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-400. Relation to Electronic Signatures in Global and National Commerce Act. Sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, modify, limit, and supersede the federal Electronic Signatures in Global and National Commerce Act, 15 USC Section 7001 et seq., except that nothing in sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, modifies, limits, or supersedes Section 7001(c) of said act or authorizes electronic delivery of any of the notices described in Section 7003(b) of said act.

(P.A. 02-81, S. 11.)

History: P.A. 02-81 effective July 1, 2003.

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PART II

ADVERTISING. DISCLOSURE OF INFORMATION

Sec. 42-401. Advertising. (a) In this section, “advertisement” means a commercial message in any medium that directly or indirectly promotes a consumer lease.

(b) An advertisement must comply with the requirements of the federal Consumer Leasing Act for advertising. If the advertised lease is not subject to said act, the advertisement must comply with those requirements as if the advertised lease were subject to said act.

(d) This section does not apply to a person acting solely as an owner or employee of a medium in which an advertisement appears or through which it is disseminated.

(P.A. 02-81, S. 12.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-402. Availability of sample lease form. (a) Before consummation of a consumer lease, a lessor, on request of an individual, shall promptly give a copy or reproduction of its current consumer lease form to the individual at the lessor's place of business. If a lessor contracts with lessees by mail, the lessor shall promptly send, on request by mail, a copy or reproduction of the form by mail. If a lessor contracts with lessees electronically, the lessor shall promptly make available, on electronic request, a copy or reproduction of the form by mail or electronically.

(b) A lessor shall furnish the first copy or reproduction of the current lease form to an individual without charge but may impose a reasonable charge for additional copies or reproductions furnished to the same individual.

(c) If a lessor uses more than one consumer lease form, the lessor satisfies this section by furnishing a form the lessor has reason to believe is pertinent to the type of lease about which the individual has inquired.

(P.A. 02-81, S. 13.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-403. Disclosure. Form of consumer lease. Copy to lessee. (a) A lessor shall make the disclosures required by the federal Consumer Leasing Act. If the lease is not subject to said act, the lessor shall make the disclosures as if the lease were subject to said act.

(b) Before renegotiation or extension of a consumer lease, the holder shall make such new disclosures as are required by the federal Consumer Leasing Act. If the lease is not subject to said act, the holder shall make the disclosures as if the lease were subject to said act. A renegotiation occurs when a consumer lease is satisfied and replaced by a new consumer lease undertaken by the same lessee for the same goods. An extension is an agreement by the holder and the lessee of an existing consumer lease to continue the lease beyond its originally scheduled expiration, except when the continuation is the result of a renegotiation.

(1) Clearly indicates at the beginning of the record that it is a lease;

(2) Contains in a location close to the lessee's signature a conspicuous statement substantially as follows: “NOTICE TO THE LESSEE: This is a lease. You are not buying the (insert here the name of the goods or vehicle). Do not sign this lease before you read it. You are entitled to a completed copy of this lease when you sign it.”;

(3) Identifies the place of business of the lessor and the residence of the lessee;

(4) Identifies any property traded in or applied as a capitalized cost reduction or similar credit; and

(5) In a lease of a motor vehicle, itemizes the gross capitalized cost by type and amount, unless this itemization is included in a separate record accompanying the lease.

(d) A lessor may not present for the lessee to sign an application for a consumer lease or a consumer lease that contains blank spaces to be filled in after it has been signed by the lessee unless the goods are to be specially ordered for future delivery, in which case the due dates of periodic payments and specific identifying numbers, marks or similar information concerning the goods may be inserted in the application or lease after the lessee has signed.

(e) Promptly after consummation of a consumer lease, the lessor shall furnish to the lessee without charge a completed written copy of the lease signed by the lessor and lessee and, if not previously furnished, a written copy of all other records that the lessee has signed in connection with the transaction. As against a holder that took the lease without knowledge to the contrary, a lessee's written acknowledgment of receipt of a copy of these records creates a presumption of delivery of the copy.

(P.A. 02-81, S. 14.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-404. Insurance. Insurance disclosures. (a) A lessor may require that the lessee maintain casualty insurance on the leased goods, or liability insurance against personal injury or property damage caused to others, or both, during the period of the lease. If a lessor requires that the lessee maintain either casualty or liability insurance, or both, the lessor shall disclose in a conspicuous manner in a record: (1) Whether the insurance is included in the lease for no additional charge; (2) if the insurance is not included in the lease or if there is an additional charge for obtaining insurance through the lessor, that the lessee may purchase the required insurance from an insurer of the lessee's choice, subject to the lessor's right to reject that insurer for reasonable cause; and (3) that the insurance policies offered by the lessor may duplicate coverage already provided by a lessee's personal insurance policies.

(b) If casualty insurance on the leased goods is neither required nor provided in a consumer lease, the lease must contain or be accompanied by a conspicuous statement in a record substantially as follows: “No insurance coverage for physical damage to the leased goods, or loss of the leased goods, is provided under this lease.”

(c) A lessor may not require the lessee to purchase credit life, accident, health, loss-of-income or similar insurance in connection with a consumer lease. If a lessor provides such insurance in connection with a consumer lease:

(1) The lessor shall disclose in a record that the insurance is not required; and

(2) The lessee's election to purchase the insurance is effective only if after receiving the disclosure the lessee separately signs a record requesting the insurance.

(d) If a lessee becomes obligated to pay an amount for insurance provided by or through the lessor, the lessor shall furnish or arrange to have furnished to the lessee a copy of the policy or certificate of insurance.

(P.A. 02-81, S. 15; P.A. 09-134, S. 1.)

History: P.A. 02-81 effective July 1, 2003; P.A. 09-134 amended Subsec. (a) by deleting former provision re insurance included in lease and requiring disclosure in a conspicuous manner of requirements re insurance coverage provided in Subdivs. (1) to (3), and inserted “conspicuous” in Subsec. (b), effective October 1, 2009, and applicable to consumer leases entered, renewed, modified or extended on or after October 1, 2009.

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Sec. 42-405. Notice to guarantor. (a) The obligation of a guarantor with respect to a consumer lease is not enforceable unless:

(1) Before the guarantor signs a record evidencing the obligation, the lessor provides to the guarantor a clear statement in a record which identifies the obligation, the lessor and the lessee and reasonably informs the guarantor of the nature of the obligation; and

(2) The lessor provides to the guarantor a copy of the signed record evidencing the guarantor's obligation and, if the guarantor requests, a copy of the lease.

(b) A statement in substantially the following form complies with subdivision (1) of subsection (a) of this section:

NOTICE

Name of Guarantor: ....

You agree to pay the lease obligation identified below although you may not personally receive any goods. You may have to pay this obligation even if the person who receives the goods is able to pay. This notice is not the contract that makes you responsible for the obligation. Read the lease for the exact terms of your obligation.

Identification of Obligation You May Have to Pay: ....

Name of Lessee: ....

Name of Lessor: ....

(c) As against a holder who took the consumer lease without knowledge to the contrary, a guarantor's signed acknowledgment of receipt of the records specified in subsection (b) of this section creates a presumption of delivery of those records to the guarantor.

(P.A. 02-81, S. 16.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-406. Information during term of lease. Computer equipment leases. Satisfaction of lease. (a) During the period of a consumer lease, the following rules apply:

(1) A person that receives a payment in money from a lessee under a consumer lease shall furnish the lessee a written receipt for the payment.

(2) If a lessee so requests in a record, the holder, within two weeks after receiving the request, shall send to the lessee in a record, as requested, a statement of:

(A) The dates and amounts of the periodic payments that have been received by holders of the lease and the total amount of the remaining periodic payments;

(B) The lessee's total obligation due to satisfy the lease if terminated at a specified date before expiration, and a statement that the amount so due will be reduced by the realized value of the goods, if that is the case; and

(C) If the lease provides for a purchase option that may be exercised at the lessee's request, the purchase option price at the date specified in the request.

(3) In a statement under subdivision (2) of this subsection, an amount that is estimated must be so identified.

(4) A holder may not charge the lessee for furnishing one statement under each subparagraph of subdivision (2) of this subsection in each twelve-month period, but may charge a fee not to exceed five dollars for furnishing each additional statement during the same period.

(b) A holder of a lease for computer or related equipment, not more than one hundred twenty days and not less than thirty days prior to the expiration date of the lease, shall provide written notice, at no cost to the lessee, informing the lessee of the lease expiration date and the lessee's rights and obligations upon expiration of the lease and, if the lease provides for a purchase option for such computer or related equipment that may be exercised at the lessee's request, the purchase option price for such computer or related equipment as of the lease expiration date. For the purposes of this subsection, “computer” means a programmable, electronic device capable of accepting and processing data.

(c) A holder, within two weeks after the lessee has discharged all of the lessee's obligations under the consumer lease, shall send to the lessee at the lessee's last-known address a copy of the lease marked “satisfied”, “paid in full” or similar term, or a separate record indicating satisfaction of the lease. The record of satisfaction does not release the lessee from liability under the lease for acts or events discovered by the holder after sending the record.

(P.A. 02-81, S. 17; P.A. 03-128, S. 1.)

History: P.A. 02-81 effective July 1, 2003; P.A. 03-128 added new Subsec. (b) re computer or related equipment leases and redesignated existing Subsec. (b) as new Subsec. (c), effective July 1, 2003.

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PART III

LIMITATIONS OF TERMS AND PRACTICES

Sec. 42-407. Payment or trade-in pending approval of lease. Refund or return. (a) If a lessee's application for a consumer lease is not approved on the terms submitted, the following rules apply:

(1) Except as otherwise provided in subdivision (2) of this subsection or in subsection (b) of this section, the lessor:

(A) Within one business day after disapproval of the application, shall tender back to the lessee any property traded in; and

(B) Promptly, but in no event more than five business days after disapproval of the application, shall refund any payment received other than an application fee.

(2) If the lessee has taken delivery of the goods before the disapproval of the lessee's application, the lessor shall tender delivery of the property traded in and the refund under subparagraph (B) of subdivision (1) of this subsection when the lessee tenders back the goods that were delivered to the lessee.

(b) In the case of a consumer lease of a motor vehicle in which the vehicle is delivered to the lessee pending approval of the lessee's application, the lessor, on or before delivery, shall give the lessee notice in a record of the rights and obligations provided in this section. If the application is not approved, the following rules apply:

(1) Except when the specified disclosure is made under subdivision (2) of this subsection, the lessor may not impose on the lessee any charge for the lessee's use of the vehicle.

(2) The lessor may impose a mileage charge for the lessee's use of the vehicle, at an amount not exceeding the mileage rate authorized for deduction under federal tax laws, but only if the fact and amount of that charge are disclosed to the lessee in a record separately signed by the lessee at the time of delivery. The lessor may offset the amount of the charge against any refund due the lessee.

(3) The limitations imposed by subdivisions (1) and (2) of this subsection do not affect a holder's right to recover for damage to or loss of the vehicle while in the lessee's possession attributable to the lessee's tortious act or omission, or forfeiture or confiscation of the vehicle under governmental authority.

(d) If a lessor contracts to purchase property from a prospective lessee separately from a consumer lease, the lessor may not withhold payment pending, or otherwise condition payment upon, consummation of a consumer lease.

(P.A. 02-81, S. 18.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-408. Prohibited lease provisions. (a) A provision of a consumer lease may not:

(1) Authorize the holder to accelerate the maturity of all or part of the amount owing on the lease whenever the holder deems itself insecure;

(2) Require the lessee to execute an authorization to confess judgment or an assignment of wages; or

(3) Authorize the holder or another person to enter upon the lessee's premises or to commit a breach of the peace in the repossession of the goods.

(b) A provision prohibited by this section is unenforceable but does not otherwise affect the validity of the lease.

(P.A. 02-81, S. 19.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-409. Security interest restricted. Security deposit. (a) Except as otherwise provided in subsection (b) of this section, a consumer lease or other record signed by the lessee in connection with the lease may not provide for the creation of a security interest in personal or real property of the lessee to secure the payment of obligations arising from the lease. A security interest created in violation of this section is unenforceable, but does not otherwise affect the validity of the lease.

(b) A consumer lease may provide for:

(1) A security deposit, advance lease payment or other prepayment;

(2) A security interest in unearned insurance premiums or rebates of charges for a contract for services, or a service contract, extended warranty or maintenance agreement regarding the leased goods;

(3) A security interest in the proceeds or benefits of insurance, or of a contract for services, service contract, extended warranty or maintenance agreement on the leased goods, except to the extent the proceeds or benefits represent reimbursement to the lessee for expenses incurred; and

(4) A security interest in an accession to the leased goods.

(c) This section does not preclude a holder from making a permissive filing of a financing statement under article 9 of the Uniform Commercial Code.

(d) A holder is not required to pay interest on a security deposit, advance lease payment or other prepayment, but is required, within two weeks after the application of a security deposit, to account to the lessee in a record for the application of the security deposit.

(P.A. 02-81, S. 20.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-410. Late fees. Delinquency and default charges. Attorney's fees. (a) A holder may impose on the lessee a late charge on a periodic payment that is delinquent for ten days or more in an amount specified in the consumer lease but not exceeding the lesser of ten dollars or five per cent of the unpaid portion of the late periodic payment. A late fee is not enforceable to the extent it exceeds this limit.

(b) A holder may not impose a late charge on a current periodic payment if the only delinquency in the current payment is an amount equal to or less than unpaid late charges imposed on earlier periodic payments, but the lease may impose an additional late charge if all or part of a periodic payment remains delinquent through an additional payment period.

(c) Subject to subsection (b) of this section regarding late charges, a consumer lease may provide for imposition on the lessee of charges for the lessee's delinquency or default, including collection, repossession and court costs, at an amount that is reasonable in light of the anticipated or actual harm caused by the delinquency or default, the difficulties of proof of loss and the inconvenience or unfeasibility of otherwise obtaining an adequate remedy.

(d) A consumer lease may provide for the imposition on the lessee of the holder's reasonable attorney's fees, but the fees are recoverable by the holder only if the holder is represented by an attorney who is not an employee of the holder. If a consumer lease provides for recovery of attorney's fees by the holder, a lessee who successfully defends a collection action is entitled to reasonable attorney's fees from the holder.

(P.A. 02-81, S. 21.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-411. Assignment of lease. Preservation of lessee's claims and defenses. (a) Until thirty days after a lessee receives from the assignor or assignee of the lease a signed notice in a record that the consumer lease has been assigned and containing the name and address of the assignee, the lessee may discharge the lessee's obligation by paying the assignor of the lease, and the following rules apply:

(1) If timely, a payment to the assignor is not subject to a late charge.

(2) Except as otherwise provided in subdivision (3) of this subsection, after the thirty-day period, the lessee discharges the lessee's obligation only by paying the assignee. An assignor who receives payment after notification is given must return the payment to the lessee or forward the payment to the assignee.

(3) If requested by the lessee after notice from the assignee under this subsection, the assignee shall seasonably furnish reasonable proof that the assignment has been made. Unless the assignee complies, the lessee may discharge the lessee's obligation by paying the assignor.

(b) Except as otherwise provided in subsection (b) of section 42-428, notwithstanding any provision in a consumer lease, a holder is subject to all claims and defenses arising from the lease which the lessee could assert against a previous holder and, if the original lessor does not select, manufacture or supply the goods, against the person from whom the lessor bought or leased the goods. A lessee's recovery from a holder under this subsection may not exceed amounts paid by the lessee to all holders under the lease.

(P.A. 02-81, S. 22.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-412. Sublease. (a) Except as otherwise provided in subsection (b) of this section, a lessee under a consumer lease may sublease or assign the lessee's rights and interest.

(b) A consumer lease may contain a specific and conspicuous provision requiring the holder's consent to a sublease or assignment of the lessee's rights and interest, and payment of a reasonable fee. In a lease for a period of more than twelve months, the provision must require the holder to consent unless the holder believes in good faith that the sublease or assignment will jeopardize the holder's rights or increase the holder's risk.

(c) Unless otherwise agreed by the holder, the obligations of the lessee under a consumer lease are not affected by a sublease or assignment, and the original lessee and the sublessee or assignee are jointly and severally liable under the assigned lease.

(P.A. 02-81, S. 23.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-413. Open-end consumer lease. (a) In an open-end consumer lease, the estimated residual value must be a reasonable approximation of the anticipated fair market value of the goods on expiration of the lease. The estimated residual value of the goods is presumed to be unreasonable and not in good faith to the extent that the estimated residual value exceeds the realized value by more than three times the average payment allocable to a monthly period under the lease. The holder may not collect from the lessee the amount presumed to be unreasonable unless the holder succeeds in an action with respect to that amount. In all actions, the holder shall pay the lessee's reasonable attorney's fees.

(b) A presumption does not arise under subsection (a) of this section to the extent the excess of estimated residual value over realized value is due to physical damage to the goods beyond reasonable wear and use, or to excessive use, according to standards set in the lease under section 42-423.

(c) This section does not preclude a lessee, after expiration of the consumer lease, from agreeing to a final adjustment with respect to residual value.

(d) Upon expiration of an open-end consumer lease, the lessee may obtain at the lessee's expense a professional appraisal of the leased goods by an independent third party agreed to by the lessee and holder. The appraisal is final and binding on the parties.

(P.A. 02-81, S. 24.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-414. Limit on insurance charges. Termination or replacement of insurance. (a) A charge for casualty, liability or credit insurance included in a consumer lease or added under subsection (c) of this section may not exceed the premium imposed by the insurer for the insurance. This subsection does not preclude:

(1) The imposition of rent charges on insurance charges capitalized in the lease; or

(2) The lessor's realization of commissions, experience rebates or similar compensation from the insurer.

(b) If insurance included in a consumer lease or added under subsection (c) of this section is canceled or terminated, a refund of unearned insurance premiums received by the holder in excess of one dollar, at the holder's option, must be:

(1) Refunded to the lessee; or

(2) Credited, together with the unearned portion of the rent charge applicable to the refunded premium, to the lessee's current obligation, the final maturing periodic payments or the lessee's obligation upon termination of the lease.

(c) If a lessee does not maintain insurance required under a consumer lease, the holder may purchase substitute insurance only against substantially the same risks, covering the interests of the lessee and the holder or the interest of either of them.

(d) An amount paid by a holder for substitute insurance under subsection (c) of this section and added to the lessee's obligation under the lease is subject to:

(1) A rent charge as if that amount were part of the adjusted capitalized cost, from the later of the effective date of the insurance or the date on which the holder notifies the lessee of the purchase of substitute insurance, its cost, and the effect on the payment schedule; and

(2) The repayment and default provisions of the lease.

(e) This section does not preclude a holder from pursuing any other remedy for default set forth in the lease or provided by law.

(P.A. 02-81, S. 25.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-415. Rebate or discount for referrals. A person may not induce or attempt to induce a lessee to consummate a consumer lease by offering a postconsummation rebate, discount, commission or other consideration on the condition that the lessee provide information or assistance for the purpose of enabling a lessor or other person to lease or sell goods to another individual.

(P.A. 02-81, S. 26.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-416. Limitation on supplier's disclaimer of implied warranty. (a) As used in this section:

(1) “Magnuson-Moss Warranty Act” means 15 USC Sections 2301 to 2312, inclusive, as amended, and includes rules, regulations, statements and interpretations issued by the Federal Trade Commission under said act.

(2) “Service contract” means a contract in a record to perform, over a fixed period or for a specified duration, services relating to the maintenance or repair, or both, of leased goods.

(3) “Supplier” means any person engaged in the business of making leased goods directly or indirectly available to lessees through consumer leases.

(4) “Written warranty” means:

(A) An affirmation of fact in a record or promise in a record made in connection with a consumer lease of goods by a supplier to a lessee, which relates to the nature of the material or workmanship, affirms or promises that the material or workmanship is defect-free or will meet a specified level of performance over a specified period, and becomes part of the basis of the bargain between the supplier and the lessee; or

(B) An undertaking in a record in connection with the lease by a supplier of goods to refund, repair, replace or take other remedial action with respect to the leased goods if the leased goods fail to meet the specifications set forth in the undertaking, which becomes part of the basis of the bargain between the supplier and the lessee.

(b) A supplier may not disclaim or, except as otherwise provided in subsection (c) of this section, modify an implied warranty to a lessee with respect to leased goods if:

(1) The supplier makes a written warranty to the lessee with respect to the leased goods; or

(2) At the time the lessee signs the lease, or within ninety days thereafter, the supplier enters into a service contract with the lessee which applies to the leased goods.

(c) Unless a supplier has made a warranty that would qualify as a full warranty under the Magnuson-Moss Warranty Act if made in connection with a sale of goods, the supplier may limit the duration of implied warranties to the duration of a written warranty of reasonable duration, if the limitation is conscionable and conspicuously displayed on the face of the warranty.

(d) A disclaimer, modification or limitation made in violation of this section is not enforceable.

(e) A term in a consumer lease that attempts to exclude or modify an implied warranty of merchantability or fitness or to exclude or modify a remedy for breach of such warranties is not enforceable.

(P.A. 02-81, S. 27.)

History: P.A. 02-81 effective July 1, 2003.

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PART IV

TERMINATION OF CONSUMER LEASE

Sec. 42-417. Liability for gap amount on total loss of goods. (a) In this section, “gap amount” means the amount that would be owed by the lessee if a total loss of the goods occasioned by theft, physical damage or other occurrence were considered an early termination of the lease, less the portion of the cash value of the goods received by the holder from the lessee's insurer or from any other source. The term does not include the deductible amount applicable to a casualty insurance policy on the goods, past due lease payments, or any other unpaid amounts owed by the lessee under the lease at the time of the total loss of the goods, or amounts by which the insurance proceeds otherwise payable are reduced on account of past due premiums or the condition of the goods before the total loss occurred.

(b) Except as otherwise provided in subsection (c) of this section, a consumer lease may not provide that the lessee is responsible for the gap amount. A provision in violation of this subsection is not enforceable.

(c) If a consumer lease so provides, the holder may recover from the lessee the portion of the gap amount attributable to:

(1) The lessee's failure to maintain in effect casualty insurance required under the lease;

(2) The lessee's fraud, intentional wrongful act or omission, or gross negligence; or

(3) The forfeiture or confiscation of the goods under governmental authority.

(P.A. 02-81, S. 28.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-418. Lessee's default. Right to cure. (a) A provision of a consumer lease stating events of default by the lessee is enforceable only to the extent that:

(1) The lessee does not make a payment required by the lease; or

(2) The holder establishes that the prospect of payment, performance or realization of the holder's interest in the goods is significantly impaired.

(b) If a default is solely the lessee's failure to make a payment required under the lease and the lessee has not voluntarily surrendered the leased goods to the holder, a holder may not accelerate, take judicial action to collect, or repossess the leased goods unless the holder initiates a procedure for cure under this section and the lessee does not cure the default in a timely manner.

(c) A holder may initiate a procedure for cure by sending to the lessee, at any time after the lessee has been in default for ten days, a notice of right to cure the default. The notice must be in a record, contain a conspicuous statement that the lessee is entitled to cure the default and set forth the monetary amount necessary to cure the default, the date by which the curative payment is due and the name, address and telephone number of the holder from which information may be obtained regarding the cure. The date by which payment is due may not be less than twenty days after the notice is sent.

(d) Within the period for cure stated in the notice under subsection (c) of this section, the lessee may cure the default by tendering the amount of all unpaid sums due at the time of the tender, including any unpaid delinquency or default charges, but without additional security deposit or prepayment of periodic payments not yet due. Cure restores the rights of holder and lessee under the lease as if the default had not occurred.

(e) A lessee has the right to cure only once in any twelve-month period during the period of the lease.

(P.A. 02-81, S. 29.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-419. Repossession. Application of realized value. Electronic self help. (a) Except as otherwise provided in subsection (d) of this section and subject to section 42-418, on a lessee's default, the holder may repossess the goods by judicial process or by self-help without a breach of the peace.

(b) After repossession of the goods on a lessee's default, the holder shall apply the realized value of the goods as provided in the lease or, if the lease contains no such provision, in the following order:

(1) Default charges and collection costs imposed under the lease;

(2) Obligations of the lessee that are due or in default under the lease; and

(3) The liability of the lessee on early termination of the lease.

(c) Unless otherwise agreed, a lessee is liable for any deficiency after application of the realized value. The holder may apply to the deficiency a security deposit taken under subdivision (1) of subsection (b) of section 42-409 but shall refund to the lessee any amount of the security deposit remaining after satisfaction of the deficiency.

(d) (1) In this subsection, “electronic self help” means the use of electronic means to exercise a holder's rights pursuant to subsection (a) of this section and “electronic” means relating to technology that has electrical, digital, magnetic or wireless optical electromagnetic properties or similar capabilities. “Electronic self help” includes the use of electronic means to locate the goods.

(2) Electronic self help is permitted only if the lessee separately agrees to a term of the lease authorizing electronic self help that requires notice of exercise as provided in subdivision (3) of this subsection.

(3) Before resorting to electronic self help authorized by a term of the lease, the holder shall give notice to the lessee stating:

(A) That the holder intends to resort to electronic self help as a remedy on or after fifteen days following communication of the notice to the lessee;

(B) The nature of the claimed breach that entitled the holder to resort to self help; and

(C) The name, title, address and telephone number of a person representing the holder with whom the lessee may communicate concerning the goods.

(4) A lessee may recover direct and incidental damages caused by wrongful use of electronic self help. The lessee may also recover consequential damages for wrongful use of electronic self help even if such damages are excluded by the terms of the lease.

(5) Even if the holder complies with subdivisions (2) and (3) of this subsection, electronic self help may not be used if the holder has reason to know that its use will result in substantial injury or harm to the public health or safety or grave harm to the public interest substantially affecting third parties not involved in the dispute.

(P.A. 02-81, S. 30.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-420. Determining realized value. (a) Subject to subsection (b) of this section, the amount of the realized value, if used to determine the lessee's liability on termination of a consumer lease, is the sum of:

(1) The amount of the rebate of premiums or charges for insurance, extended warranty, or service or maintenance contract to the extent the rebates are received by the holder; and

(2) One of the following:

(A) The price received by the holder on disposition of the leased goods by sale;

(B) If the goods are re-leased, the total of periodic payments plus the residual value under the new lease, reduced to present value; or

(C) If the goods are not disposed of, the higher of: (i) The best offer for disposition of the goods; or (ii) the fair market value of the goods.

(b) A lessee and holder under a consumer lease may agree at the time of termination on the realized value of the goods, or may agree in the lease or at the time of termination on a method for determining it, and the value so agreed upon or determined, unless unreasonable, is the realized value. An agreed realized value is not unreasonable if the value is determined by an appraiser agreed to by the holder and lessee, or by reference to a generally accepted reference source for goods of the kind.

(c) If the realized value is determined under subparagraph (A) or (B) of subdivision (2) of subsection (a) of this section, the disposition may be by public or private sale or re-lease, at any time and place and on any terms. Every aspect of the disposition, including the method, manner, time, place and terms must be commercially reasonable. Disposition in a wholesale market is not unreasonable.

(d) If a disposition is to a person related to the holder, or a person obligated to the holder under an agreement for recourse, repurchase or the like, the realized value is not less than the fair market value of the goods.

(e) If a disposition is not commercially reasonable, the realized value must be established by reference to the retail market value of goods of the kind and condition at issue.

(P.A. 02-81, S. 31.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-421. Early termination liability. (a) A consumer lease may provide a measure or formula for the lessee's liability on early termination, but only at an amount reasonable in light of the anticipated or actual harm caused by the early termination, the difficulties of proof of loss and the inconvenience or unfeasibility of otherwise obtaining an adequate remedy. An early termination charge does not include:

(1) Unpaid periodic payments, or unpaid late, delinquency or default charges, accrued through the date of early termination;

(2) Charges provided under the lease for excess wear and tear or excess mileage, but only to the extent the excess wear and tear or excess mileage are not otherwise accounted for in the early termination charge;

(3) Other unpaid amounts for which the lessee is responsible under the lease;

(4) Official fees and taxes imposed in connection with lease termination; or

(5) The greater of a reasonable disposition fee in a fixed amount disclosed in the lease or the reasonable costs incurred in retaking, storing, preparing for disposition and disposing of the goods.

(b) A charge imposed on a lessee for early termination of a consumer lease other than an open-end consumer lease may not exceed the total of the remaining periodic payments scheduled under the lease.

(P.A. 02-81, S. 32.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-422. Reporting early termination to consumer reporting agency. If a consumer lease is terminated before its scheduled expiration by mutual agreement of the holder and lessee, the holder may not report the early termination to a consumer reporting agency as a default by the lessee or guarantor. This section does not preclude the holder from reporting to a consumer reporting agency a previous default by the lessee or guarantor under the lease or a later default under the early termination agreement.

(P.A. 02-81, S. 33.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-423. Excess wear and tear. Excess mileage. (a) A consumer lease may prescribe standards and impose liability on the lessee for excess wear and tear of the leased goods if the standards and amounts of liability are reasonable and reasonably applied to compensate the holder due to damage, abuse or lack of maintenance, but not exceeding the estimated or actual cost of repair and refurbishing.

(b) Standards for excess wear and tear do not subject the lessee to liability for:

(1) Ordinary and expected wear, use and depreciation of the goods during the period of the lessee's possession and use; or

(2) Damage or repair to the extent:

(A) The leased goods are covered by insurance, warranty, or by a repair, service or maintenance agreement issued in connection with the lease;

(B) Recovery or repair under the insurance, warranty or agreement is available to the holder; and

(C) The lessee cooperates as necessary to submit, document and process a claim under the insurance, warranty or agreement.

(c) In connection with the expiration of a consumer lease of goods other than a motor vehicle, if the holder charges the lessee for excess wear and tear, the holder shall:

(1) Send to the lessee notice in a record of the nature and amount of the charges within five business days after the goods are returned to the holder; and

(2) Provide reasonable time and access for the lessee or another person designated by the lessee to examine the goods.

(d) The time is reasonable under subdivision (2) of subsection (c) of this section if it is no less than twelve business days after the holder sends the notice under subdivision (1) of subsection (c) of this section.

(e) In addition to charges for excess wear and tear under chapter 743k, a consumer lease of a motor vehicle may provide for the imposition of a reasonable charge for excess mileage.

(P.A. 02-81, S. 34.)

History: P.A. 02-81 effective July 1, 2003.

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PART V

PENALTIES. ENFORCEMENT. ADMINISTRATION

Sec. 42-424. Private remedies. (a) In sections 42-424 to 42-431, inclusive, with respect to violations of sections 42-405 and 42-422, “lessee” includes a guarantor.

(b) A holder that violates sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, is liable to the lessee for actual damages. Where actual damages are claimed as a result of an alleged violation of a disclosure requirement under sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, the lessee must show reliance on the holder's conduct to the lessee's detriment as a necessary element to recovering the damages.

(c) Whether or not a lessee seeks or is entitled to damages, the lessee may maintain an action for declaratory or injunctive relief.

(d) Except in a class action, and except as otherwise provided in sections 42-424 to 42-431, inclusive, in addition to actual damages under subsection (b) of this section, a holder who violates sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, is liable for statutory damages of twenty-five per cent of the amount of payments scheduled under the lease, but no less than five hundred dollars and no more than one thousand dollars for a violation of any of the following provisions: Subsection (a) or (b) of section 42-403, subdivision (1), (2), (4) or (5) of subsection (c) of section 42-403, subsection (d) of section 42-403, section 42-404, section 42-406 or 42-407, subsection (d) of section 42-409, subsection (b) of section 42-410, subsection (c) of section 42-414, section 42-415 or 42-422 or subsection (c) of section 42-423.

(e) In a successful action under sections 42-424 to 42-431, inclusive, a lessee is also entitled to the costs of the action and, except as otherwise provided in subsection (f) of this section, reasonable attorney's fees as determined by the court. In determining the award of attorney's fees, the amount of the lessee's recovery is not controlling.

(f) In order for a lessee as plaintiff in an action for monetary damages to recover attorney's fees under subsection (e) of this section, the following rules apply:

(1) Before the commencement of the action, the lessee must send the holder notice in a record of the alleged violation and the damages sought.

(2) If, within twenty days after the lessee's notification is sent, the holder provides the lessee with an offer of settlement in a record agreeing to pay the lessee an amount that equals or exceeds the damages eventually awarded to the lessee in the final judgment entered in the action, the lessee may not recover attorney's fees incurred after the lessee's receipt of the settlement offer. The lessee may nevertheless recover attorney's fees incurred before the receipt of the settlement offer in an amount determined by the court based on a reasonable hourly rate.

(3) Notification by the lessee under subdivision (1) of this subsection tolls the statute of limitations for a period of sixty days after the date the notification is sent.

(P.A. 02-81, S. 35.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-425. Reliance on lessee's representations. A holder is not liable to any person, and a holder's rights under a lease are not affected, because of any act or omission arising out of the holder's reasonable belief that a transaction is not a consumer lease if the holder's belief is based on its reasonable reliance on a lessee's representation in a record concerning the purpose for which the leased goods were to be used.

(P.A. 02-81, S. 36.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-426. Statute of limitations. (a) Except as otherwise provided in subsections (b) to (d), inclusive, of this section, an action under sections 42-424 to 42-431, inclusive, may not be commenced more than three years after the termination of the lease that is the subject of the action.

(b) A class action under sections 42-424 to 42-431, inclusive, may not be commenced more than three years after the occurrence of the violation that is the subject of the action.

(c) An action for a violation of section 42-402, 42-403 or 42-404 may not be commenced more than three years after the date of the consummation of the lease.

(d) A lessee's claim for actual or statutory damages under sections 42-424 to 42-431, inclusive, may be raised by way of recoupment in an action by the holder on the lease without regard to the periods specified in subsections (a) to (c), inclusive, of this section.

(P.A. 02-81, S. 37.)

History: P.A. 02-81 effective July 1, 2003 (Revisor's note: In Subsec. (d), the reference to “subsections (a) to (c), inclusive, of this act” was codified by the Revisors as “subsections (a) to (c), inclusive, of this section” for accuracy).

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Sec. 42-427. Limitations on private remedies. (a) A holder is not liable for statutory damages under subsection (d) of section 42-424 if, within sixty days after discovering a violation of sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, and before commencement of an action under section 42-424 or the receipt of written notice of the violation from the lessee, the holder notifies the lessee concerned and corrects the violation, including refund, restitution or crediting of any charges improperly disclosed or imposed.

(b) A holder is not liable for statutory damages under subsection (d) of section 42-424 if the holder proves by a preponderance of the evidence that the violation was unintentional and resulted from an error in good faith notwithstanding the maintenance of procedures reasonably adapted to avoid the error. For purposes of this subsection, errors in good faith include clerical errors, calculation errors, computer malfunctions and programming errors, but an error of legal judgment with respect to a holder's obligations under sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, is not a good faith error.

(c) There may be no more than one recovery of statutory damages under subsection (d) of section 42-424 for a violation of sections 42-425 to 42-431, inclusive, regardless of the number of lessees in the consumer lease.

(d) Liability does not arise under sections 42-424 to 42-431, inclusive, with respect to an act or omission in good faith conforming to:

(1) A rule or interpretation of sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, or to an approval by the Commissioner of Consumer Protection, even if after the act or omission occurred, the rule, interpretation or approval is amended, rescinded or determined by judicial or other authority to be invalid; or

(2) With respect to requirements based on the federal Consumer Leasing Act, a rule, regulation or interpretation of said act by the Federal Reserve Board or the Bureau of Consumer Financial Protection, even if after the act or omission occurred, the rule, regulation or interpretation is amended, rescinded or determined by judicial or other authority to be invalid.

(e) Regardless of the number of violations resulting from a holder's multiple failures to comply with the provisions enumerated in subsection (d) of section 42-424 with respect to a single consumer lease, the lessee is entitled to a single recovery of statutory damages under sections 42-424 to 42-431, inclusive, but continued failure to comply after a recovery has been granted gives rise to rights to additional recoveries.

(P.A. 02-81, S. 38; June 30 Sp. Sess. P.A. 03-6, S. 146(c); P.A. 04-189, S. 1; P.A. 11-110, S. 13.)

History: P.A. 02-81 effective July 1, 2003; June 30 Sp. Sess. P.A. 03-6 replaced Commissioner of Consumer Protection with Commissioner of Agriculture and Consumer Protection, effective July 1, 2004; P.A. 04-189 repealed Sec. 146 of June 30 Sp. Sess. P.A. 03-6, thereby reversing the merger of the Departments of Agriculture and Consumer Protection, effective June 1, 2004; P.A. 11-110 amended Subsec. (d)(2) to add reference to Bureau of Consumer Financial Protection, effective July 21, 2011.

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Sec. 42-428. Civil liability of assignees. (a) Except as otherwise provided in subsection (b) of this section, the liability of a holder for a violation of sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, by a previous holder is subject to subsection (b) of section 42-411.

(b) An action for a violation of subsection (d) of section 42-404 or section 42-406 or 42-415, or for a violation of the disclosure requirements of section 42-402 or 42-403 or subsection (a), (b) or (c) of section 42-404 may be maintained against a subsequent holder only if:

(1) A required disclosure is omitted or can be determined to be incomplete or inaccurate from the face of the record or other documents assigned; or

(2) The record does not contain a notice, provision or statement required to be used under sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive.

(P.A. 02-81, S. 39.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-429. Effect of violation on rights of parties. Single recovery. (a) Except as otherwise provided in sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, a violation of sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, by a holder does not impair the holder's rights under a consumer lease.

(b) If a holder's act or omission violates sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, and also violates other law, the lessee is entitled to the larger of the monetary remedies authorized by sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, or the other law.

(P.A. 02-81, S. 40.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-430. Administrative enforcement. The Commissioner of Consumer Protection shall enforce the provisions of sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive. For this purpose, the commissioner has the power and is entitled to the remedies provided in the Unfair Trade Practices Act, chapter 735a.

(P.A. 02-81, S. 41; June 30 Sp. Sess. P.A. 03-6, S. 146(c); P.A. 04-189, S. 1.)

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Sec. 42-431. Administration. (a) The Commissioner of Consumer Protection shall administer sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, and may adopt regulations designed to effectuate consumer protection under sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive; prevent circumvention or evasion of, and facilitate compliance with, sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive; avoid preemption by the federal Consumer Leasing Act; and assure consistent interpretations with those of other states enacting legislation substantially the same as sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive.

(b) To keep the commissioner's regulations in harmony with those of administrators in other states that enact legislation substantially the same as sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, the commissioner, to the extent consistent with the provisions of sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, in adopting, amending and repealing regulations, shall take into consideration the regulations of administrators in other states that enact legislation substantially the same as sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive.

(P.A. 02-81, S. 42; June 30 Sp. Sess. P.A. 03-6, S. 146(c); P.A. 04-189, S. 1.)

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PART VI

MISCELLANEOUS PROVISIONS

Sec. 42-432. Severability. If any provision of sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, or the application of said sections to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, that can be given effect without the invalid provision or application, and to this end the provisions of sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, are severable.

(P.A. 02-81, S. 43.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-433. Transition. A consumer lease entered into before July 1, 2003, and the rights, duties and interests resulting from it may be terminated, completed or enforced as required or permitted by any statute, rule of law or other law amended, repealed or modified by sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, as though the repeal, amendment, or modification had not occurred. However, sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, apply when, after July 1, 2003, a consumer lease is satisfied and replaced by a new lease undertaken by the same lessee for the same goods.

(P.A. 02-81, S. 44.)

History: P.A. 02-81 effective July 1, 2003.

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Sec. 42-434. Uniformity. In applying and construing sections 42-270 to 42-271a, inclusive, and 42-390 to 42-434, inclusive, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

(P.A. 02-81, S. 45.)

History: P.A. 02-81 effective July 1, 2003.

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Secs. 42-435 to 42-449. Reserved for future use.

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