70A-2a-504 - Liquidation of damages.
70A-2a-504. Liquidation of damages.
(1) Damages payable by either party for default, or any other act or omission, includingindemnity for loss or diminution of anticipated tax benefits or loss or damage to lessor's residualinterest, may be liquidated in the lease agreement, but only at an amount or by a formula that isreasonable in light of the then anticipated harm caused by the default or other act or omission.
(2) If the lease agreement provides for liquidation of damages, and such provision doesnot comply with Subsection (1), or such provision is an exclusive or limited remedy thatcircumstances cause to fail of its essential purpose, remedy may be had as provided in thischapter.
(3) If the lessor justifiably withholds or stops delivery of goods because of the lessee'sdefault or insolvency as provided in Section 70A-2a-525 or 70A-2a-526, the lessee is entitled torestitution of any amount by which the sum of his payments exceeds:
(a) the amount to which the lessor is entitled by virtue of terms liquidating the lessor'sdamages in accordance with Subsection (1); or
(b) in the absence of those terms, 20 percent of the then present value of the total rent thelessee was obligated to pay for the balance of the lease term, or, in the case of a consumer lease,the lesser of such amount or $500.
(4) A lessee's right to restitution under Subsection (3) is subject to offset to the extent thelessor establishes:
(a) a right to recover damages under the provisions of this chapter other than Subsection(1); and
(b) the amount or value of any benefits received by the lessee directly or indirectly byreason of the lease contract.
Enacted by Chapter 197, 1990 General Session