8.2-718 - Liquidation or limitation of damages; deposits.
§ 8.2-718. Liquidation or limitation of damages; deposits.
(1) Damages for breach by either party may be liquidated in the agreement butonly at an amount which is reasonable in the light of the anticipated oractual harm caused by the breach, the difficulties of proof of loss, and theinconvenience or nonfeasibility of otherwise obtaining an adequate remedy. Aterm fixing unreasonably large liquidated damages is void as a penalty.
(2) Where the seller justifiably withholds delivery of goods because of thebuyer's breach, the buyer is entitled to restitution of any amount by whichthe sum of his payments exceeds
(a) the amount to which the seller is entitled by virtue of terms liquidatingthe seller's damages in accordance with subsection (1), or
(b) in the absence of such terms, twenty per cent of the value of the totalperformance for which the buyer is obligated under the contract or $500,whichever is smaller.
(3) The buyer's right to restitution under subsection (2) is subject tooffset to the extent that the seller establishes
(a) a right to recover damages under the provisions of this title other thansubsection (1), and
(b) the amount or value of any benefits received by the buyer directly orindirectly by reason of the contract.
(4) Where a seller has received payment in goods their reasonable value orthe proceeds of their resale shall be treated as payments for the purposes ofsubsection (2); but if the seller has notice of the buyer's breach beforereselling goods received in part performance, his resale is subject to theconditions laid down in this title on resale by an aggrieved seller (§8.2-706).
(1964, c. 219.)