N.M. Stat. § 55-2A-516
Effect of acceptance of goods; notice of default; burden
of establishing default after acceptance; notice of claim or litigation
to person answerable over.
(1) A lessee must pay rent for any goods accepted in accordance with the lease
contract, with due allowance for goods rightfully rejected or not delivered.
(2) A lessee's acceptance of goods precludes rejection of the goods accepted. In the
case of a finance lease, if made with knowledge of a nonconformity, acceptance cannot
be revoked because of it. In any other case, if made with knowledge of a nonconformity,
acceptance cannot be revoked because of it unless the acceptance was on the
reasonable assumption that the nonconformity would be seasonably cured. Acceptance
does not of itself impair any other remedy provided by this article or the lease
agreement for nonconformity.
(3) If a tender has been accepted:
(a)
within a reasonable time after the lessee discovers or should have
discovered any default, the lessee shall notify the lessor and the supplier, if any, or be
barred from any remedy against the party not notified;
(b)
except in the case of a consumer lease, within a reasonable time after the
lessee receives notice of litigation for infringement or the like (Section 55-2A-211 NMSA
1978) the lessee shall notify the lessor or be barred from any remedy over for liability
established by the litigation; and
(c)
the burden is on the lessee to establish any default.
(4) If a lessee is sued for breach of a warranty or other obligation for which a lessor
or a supplier is answerable over the following apply:
(a)
The lessee may give the lessor or the supplier, or both, written notice of
the litigation. If the notice states that the person notified may come in and defend and
that if the person notified does not do so that person will be bound in any action against
that person by the lessee by any determination of fact common to the two litigations,
then unless the person notified after seasonable receipt of the notice does come in and
defend that person is so bound.
(b)
The lessor or the supplier may demand in writing that the lessee turn over
control of the litigation including settlement if the claim is one for infringement or the like
(Section 55-2A-211 NMSA 1978) or else be barred from any remedy over. If the
demand states that the lessor or the supplier agrees to bear all expense and to satisfy
any adverse judgment, then unless the lessee after seasonable receipt of the demand
does turn over control the lessee is so barred.
(5) Subsections (3) and (4) apply to any obligation of a lessee to hold the lessor or
the supplier harmless against infringement or the like (Section 55-2A-211 NMSA 1978).