New Jersey § 12A:2A-504 Liquidation of damages

New Jersey Statutes

§ 12A:2A-504 — Liquidation of damages

New Jersey § 12A:2A-504

Title 12ACOMMERCIAL TRANSACTIONS

This text of New Jersey § 12A:2A-504 (Liquidation of damages) is published on Counsel Stack Legal Research, covering New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

N.J. Stat. Ann. § 12A:2A-504 (2026).

Text

12A:2A-504. Liquidation of damages.

(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 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 this provision does not comply with subsection (1), or this 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 i

Free access — add to your briefcase to read the full text and ask questions with AI

12A:2A-504. Liquidation of damages. (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 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 this provision does not comply with subsection (1), or this 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 (12A:2A-525 or 12A:2A-526), 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 in accordance with subsection (1); or (b) in the absence of those terms, 20 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 $500. (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. L.1994,c.114,s.1.