Texas Statutes
Subchapter E. Default
Section 2A.518. Cover; Substitute Goods

Sec. 2A.518. COVER; SUBSTITUTE GOODS. (a) After default by a lessor under the lease contract of the type described by Section 2A.508(a), or, if agreed, after other default by the lessor, the lessee may cover by making any purchase or lease of or contract to purchase or lease goods in substitution for those due from the lessor.
(b) Except as otherwise provided with respect to damages liquidated in the lease agreement (Section 2A.504) or otherwise determined pursuant to agreement of the parties (Sections 1.302 and 2A.503), if a lessee's cover is by a lease agreement substantially similar to the original lease agreement and the new lease agreement is made in good faith and in a commercially reasonable manner, the lessee may recover from the lessor as damages (1) the present value, as of the date of the commencement of the term of the new lease agreement, of the rent under the new lease agreement applicable to that period of the new lease term which is comparable to the then remaining term of the original lease agreement minus the present value as of the same date of the total rent for the then remaining lease term of the original lease agreement, and (2) any incidental or consequential damages, less expenses saved as a consequence of the lessor's default.
(c) If the lessee's cover is by lease agreement that for any reason does not qualify for treatment under Subsection (b) or is by purchase or otherwise, the lessee may recover from the lessor as if the lessee had elected not to cover and Section 2A.519 governs.
Added by Acts 1993, 73rd Leg., ch. 570, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 2003, 78th Leg., ch. 542, Sec. 6, eff. Sept. 1, 2003.

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