William leases a backhoe for six months from Hunter Leasing but fails to make timely payment.Hunter Leasing may recover:

Question

Quizplus · Accepted Answer

Hunter Leasing can recover the difference between the present values due under the original lease and the market value for the remainder of the term of the original lease. This is known as the "deficiency balance" and is allowed under most leasing contracts. They cannot recover only the backhoe itself, as the lease agreement gives them the right to receive payments as well. They also cannot recover only the contract amount of lease or the market value for the period of time covered by William's nonpayment, as these options do not take into account the full value of the lease agreement.

William Leases a Backhoe for Six Months from Hunter Leasing