§ 2—718.
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/vt/2-98A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
§ 2—718. Liquidation or limitation of damages; deposits
(1)Damages for breach by either party may be liquidated in the agreement but only at an amount which is reasonable in the light of the anticipated or actual harm caused by the breach, the difficulties of proof of loss, and the inconvenience or nonfeasibility of otherwise obtaining an adequate remedy. A term fixing unreasonably large liquidated damages is void as a penalty.
(2)Where the seller justifiably withholds delivery of goods because of the buyer’s breach, the buyer is entitled to restitution of any amount by which the sum of his or her payments exceeds:
(a)the amount to which the seller is entitled by virtue of terms liquidating the seller’s damages in accordance with subsection
(1)of this section, or
(b)in the absence of such terms, twenty per cent of the value of the total performance for which the buyer is obligated under the contract or $500, whichever is smaller.
(3)The buyer’s right to restitution under subsection
(2)of this sectionis subject to offset to the extent that the seller establishes:
(a)a right to recover damages under the provisions of this article other than subsection
(1)of this section, and
(b)the amount or value of any benefits received by the buyer directly or indirectly by reason of the contract.
(4)Where a seller has received payment in goods their reasonable value or the proceeds of their resale shall be treated as payments for the purposes of subsection
(2)of this section; but if the seller has notice of the buyer’s breach before reselling goods received in part performance, his or her resale is subject to the conditions laid down in this article on resale by an aggrieved seller (§ 2—706).