(a) If the lessor fails to deliver the goods in conformity to the lease contract or repudiates the contract, or a lessee rightfully rejects the goods or justifiably revokes acceptance of the goods, with respect to any goods involved and with respect to all of the goods if under an installment lease contract the value of the whole lease contract is substantially impaired, the lessor is in default under the lease contract, and the lessee may do one or more of the following:

(1) Cancel the lease contract under section 42a-2A-709;

(2) Recover so much of the rent and security as has been paid and is just under the circumstances;

(3) Cover and obtain damages under section 42a-2A-734;

(4) Recover damages for nondelivery under section 42a-2A-735;

(5) If an acceptance of goods has not been justifiably revoked, recover damages for default with regard to accepted goods under section 42a-2A-736;

(6) Enforce a security interest under subsection (d) of this section;

(7) Recover identified goods under section 42a-2A-737;

(8) Obtain specific performance under section 42a-2A-708;

(9) Recover incidental and consequential damages under sections 42a-2A-706 and 42a-2A-707;

(10) Recover liquidated damages under section 42a-2A-710;

(11) Enforce limited remedies under section 42a-2A-711;

(12) Recover damages under section 42a-2A-705; or

(13) Exercise any other rights or pursue any other remedy provided in the lease contract.

(b) If the lessor is otherwise in default under a lease contract, the lessee may exercise the rights and pursue the remedies provided in the lease agreement, which may include a right to cancel the lease, and the rights and remedies under subsection (a) of section 42a-2A-736.

(c) If a lessor has breached a warranty, whether express or implied, the lessee may recover damages under subsection (b) of section 42a-2A-736.

(d) On rightful rejection or justifiable revocation of acceptance, a lessee has a security interest in goods in the lessee's possession or control for any rent and security that has been paid and any expenses reasonably incurred in their inspection, receipt, transportation, care and custody. In such case, the lessee may hold the goods and dispose of them in good faith and in a commercially reasonable manner. The disposition is subject to subsections (d) and (e) of section 42a-2A-720.

(e) Subject to section 42a-2A-607, a lessee, on so notifying the lessor, may deduct all or any part of the damages resulting from any default under the lease contract from any part of the rent still due under the same contract.

(P.A. 02-131, S. 77.)