§ 2-718. Liquidation or limitation of damages; deposits.
A. 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. 27A ONC § 2-719 determines the enforceability of a term that limits but does not liquidate damages.
B. If the seller justifiably withholds delivery of goods or stops performance because of the buyer’s breach or insolvency, the buyer is entitled to restitution of any amount by which the sum of the buyer’s payments exceeds the amount to which the seller is entitled by virtue of terms liquidating the seller’s damages in accordance with subsection (A) of this section.
1. The amount to which the seller is entitled by virtue of terms liquidating the seller’s damages in accordance with subsection (A) of this section; or
2. In the absence of such terms, twenty percent (20%) of the value of the total performance for which the buyer is obligated under the contract or Five Hundred Dollars ($500.00), whichever is smaller.
C. The buyer’s right to restitution under subsection (B) of this section is subject to offset to the extent that the seller establishes:
1. A right to recover damages under the provisions of this Article other than subsection (A) of this section; and
2. The amount or value of any benefits received by the buyer directly or indirectly by reason of the contract.
D. 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 (B) of this section; but if the seller has notice of the buyer’s breach before reselling goods received in part performance, his resale is subject to the conditions laid down in this Article on resale by an aggrieved seller (27A ONC § 2-706). ONCA 13-23, eff. Sept. 24, 2013.