§ 4-2-718 — Liquidation or limitation of damages - deposits

Colorado § 4-2-718

• Jurisdiction: Colorado
• Title 04: Uniform
• Art.: Sales

Text

(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 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 percent of the value of the total
performance for which the buyer is obligated under the contract or five hundred
dollars, whichever is smaller.

(3) The buyer's right to restitution under subsection (2) of this section is
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 resale is subject to the
conditions laid down in this article on resale by an aggrieved seller (section 4-2-706).

Legislative History

Source: L. 65: p. 1341, � 1. C.R.S. 1963: � 155-2-718.