§ 34.1-2-718 — 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. A
term fixing unreasonably large liquidated damages is void as a
penalty.
(b) 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 payment
exceeds:
(i) The amount to which the seller is entitled by
virtue of terms liquidating the seller's damages in accordance
with subsection (a); or
(ii) 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)
is subject to offset to the extent that the seller establishes:
(i) A right to recover damages under the provisions
of this article other than subsection (a); and
(ii) 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); 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 34.1-2-706).