§ 6A-2.1-504 - Liquidation of damages.
SECTION 6A-2.1-504
§ 6A-2.1-504 Liquidation of damages.– (1) Damages payable by either party for default, or any other act or omission,including indemnity for loss or diminution of anticipated tax benefits or lossor damage to lessor's residual interest, may be liquidated in the leaseagreement but only at an amount or by a formula that is reasonable in light ofthe then anticipated harm caused by the default or other act or omission.
(2) If the lease agreement provides for liquidation ofdamages, and such provision does not comply with subsection (1), or suchprovision is an exclusive or limited remedy that circumstances cause to fail ofits essential purpose, remedy may be had as provided in this chapter.
(3) If the lessor justifiably withholds or stops delivery ofgoods because of the lessee's default or insolvency (§ 6A-2.1-525 or6A-2.1-526), the lessee is entitled to restitution of any amount by which thesum of his or her payments exceeds:
(a) The amount to which the lessor is entitled by virtue ofterms liquidating the lessor's damages in accordance with subsection (1); or
(b) In the absence of those terms, 20 percent of the thenpresent value of the total rent the lessee was obligated to pay for the balanceof the lease term, or, in the case of a consumer lease, the lesser of suchamount or $500.
(4) A lessee's right to restitution under subsection (3) issubject to offset to the extent the lessor establishes:
(a) A right to recover damages under the provisions of thischapter other than subsection (1); and
(b) The amount or value of any benefits received by thelessee directly or indirectly by reason of the lease contract.