Commercial Code section 10524

(a)

After a default by the lessee under the lease contract of the type described in subdivision (a) of, or paragraph (1) of subdivision (c) of, Section 10523 or, if agreed, after other default by the lessee, the lessor may:

(1)

Identify to the lease contract conforming goods not already identified if at the time the lessor learned of the default they were in the lessor’s or the supplier’s possession or control; and

(2)

Dispose of goods (subdivision (a) of Section 10527) that demonstrably have been intended for the particular lease contract even though those goods are unfinished.

(b)

If the goods are unfinished, in the exercise of reasonable commercial judgment for the purposes of avoiding loss and of effective realization, an aggrieved lessor or the supplier may either complete manufacture and wholly identify the goods to the lease contract or cease manufacture and lease, sell, or otherwise dispose of the goods for scrap or salvage value or proceed in any other reasonable manner.

Source: Section 10524, https://leginfo.­legislature.­ca.­gov/faces/codes_displaySection.­xhtml?lawCode=COM§ionNum=10524.­ (updated Jul. 15, 1991; accessed Nov. 3, 2025).

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Verified:
Nov. 3, 2025

§ 10524's source at ca​.gov