§ 41-02.1-52 — (2A-504) Liquidation of damages

North Dakota § 41-02.1-52

• Jurisdiction: North Dakota
• Title 41: Uniform Commercial Code
• Ch. 41-02.1: Leases

Text

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 loss or damage to a
lessor's residual interest, may be liquidated in the lease agreement but only at an
amount or by a formula that is reasonable 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 the provision does not
comply with subsection 1, or the provision is an exclusive or limited remedy that
circumstances cause to fail of its essential purpose, remedy may be had as provided
in this chapter.
3. If the lessor justifiably withholds or stops delivery of goods because of the lessee's
default or insolvency (section 41-02.1-73 or 41-02.1-74), the lessee is entitled to
restitution of any amount by which the sum of the lessee's payments exceeds:
a. The amount to which the lessor is entitled by virtue of terms liquidating the
lessor's damages under subsection 1; or
b. In the absence of those terms, twenty percent of the then present value of the
total rent the lessee was obligated to pay for the balance of the lease term, or, in
the case of a consumer lease, the lesser of that amount or five hundred dollars.
4. A lessee's right to restitution under subsection 3 is subject to offset to the extent the
lessor 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
by reason of the lease contract.