8.2A-504 - A-504. Liquidation of damages. - Virginia Statutes

§ 8.2A-504. Liquidation of damages.

(1) Damages payable by either party for default, or any other act oromission, including indemnity for loss or diminution of anticipated taxbenefits or loss or damage to lessor's residual interest, may be liquidatedin the lease agreement but only at an amount or by a formula that isreasonable in light of the then anticipated harm caused by the default orother act or omission.

(2) If the lease agreement provides for liquidation of damages, and suchprovision does not comply with subsection (1) of this section, or suchprovision is an exclusive or limited remedy that circumstances cause to failof its essential purpose, remedy may be had as provided in this title.

(3) If the lessor justifiably withholds or stops delivery of goods because ofthe lessee's default or insolvency, under § 8.2A-525 or § 8.2A-526, thelessee is entitled to restitution of any amount by which the sum of his orher payments exceeds:

(a) The amount to which the lessor is entitled by virtue of terms liquidatingthe lessor's damages in accordance with subsection (1) of this section; or

(b) In the absence of those terms, twenty percent of the then present valueof the total rent the lessee was obligated to pay for the balance of thelease term, or, in the case of a consumer lease, the lesser of such amount or$500.

(4) A lessee's right to restitution under subsection (3) of this section issubject to offset to the extent the lessor establishes:

(a) A right to recover damages under the provisions of this Article otherthan subsection (1) of this section; and

(b) The amount or value of any benefits received by the lessee directly orindirectly by reason of the lease contract.

(1991, c. 536.)