(1) If a lessor fails to deliver the goods in conformity to the lease contract (Section 2A-509 of this title) or repudiates the lease contract (Section 2A-402 of this title), or a lessee rightfully rejects the goods (Section 2A-509 of this title) or justifiably revokes acceptance of the goods (Section 2A-517 of this title), then 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 (Section 2A-510 of this title), the lessor is in default under the lease contract and the lessee may:

(2) If a lessor fails to deliver the goods in conformity to the lease contract or repudiates the lease contract, the lessee may also:

(3) If a lessor is otherwise in default under a lease contract, the lessee may exercise the rights and pursue the remedies provided in the lease contract, which may include a right to cancel the lease, and in subsection (3) of Section 2A-519 of this title.

(4) If a lessor has breached a warranty, whether express or implied, the lessee may recover damages (subsection (4) of Section 2A-519 of this title).

(5) On rightful rejection or justifiable revocation or 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, and care and custody and may hold those goods and dispose of them in good faith and in a commercially reasonable manner, subject to subsection (5) of Section 2A-527 of this title.

(6) Subject to the provisions of Section 2A-407 of this title, a lessee, on notifying the lessor of the lessee's intention to do so, 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 lease contract.