N.Y. UCC Law § 2-A-221

Section 2-A-221. Casualty to Identified Goods.\n If a lease contract requires goods identified when the lease contract\nis made, and the goods suffer casualty without fault of the lessee, the\nlessor or the supplier before delivery, or the goods suffer casualty\nbefore risk of loss passes to the lessee pursuant to the lease agreement\nor Section 2-A-219, then:\n (1) if the loss is total, the lease contract is avoided; and\n (2) if the loss is partial or the goods have so deteriorated as to no\nlonger conform to the lease contract, the lessee may nevertheless demand\ninspection and at his or her option either treat the lease contract as\navoided or, except in a finance lease that is not a consumer lease,\naccept the goods with due allowance from the rent payable for the\nbalance of the lease term for the deterioration or the deficiency in\nquantity but without further right against the lessor.\n