Kentucky Statutes 355.2A-504 – Liquidation of damages
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(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 such provision does not comply with subsection (1), or such provision is an exclusive or limited remedy that circumstances cause to fail of its essential purpose, remedy may be had as provided in this article.
(3) If the lessor justifiably withholds or stops delivery of goods because of the lessee‘s default or insolvency (KRS 355.2A-525 or 355.2A-526), the lessee is entitled to restitution of any amount by which the sum of his 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, twenty percent (20%) 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 such amount or five hundred dollars ($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 article 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.
Effective: January 1, 1991
History: Created 1990 Ky. Acts ch. 363, sec. 51, effective January 1, 1991.
(2) If the lease agreement provides for liquidation of damages, and such provision does not comply with subsection (1), or such provision is an exclusive or limited remedy that circumstances cause to fail of its essential purpose, remedy may be had as provided in this article.
Terms Used In Kentucky Statutes 355.2A-504
- Consumer lease: means a lease that a lessor regularly engaged in the business of leasing or selling makes to a lessee who is an individual and who takes under the lease primarily for a personal, family, or household purpose. See Kentucky Statutes 355.2A-103
- Contract: A legal written agreement that becomes binding when signed.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Goods: means all things that are movable at the time of identification to the lease contract, or are fixtures (KRS §. See Kentucky Statutes 355.2A-103
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Lease: means a transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease. See Kentucky Statutes 355.2A-103
- Lessee: means a person who acquires the right to possession and use of goods under a lease. See Kentucky Statutes 355.2A-103
- Lessor: means a person who transfers the right to possession and use of goods under a lease. See Kentucky Statutes 355.2A-103
- Present value: means the amount as of a date certain of one (1) or more sums payable in the future, discounted to the date certain. See Kentucky Statutes 355.2A-103
- Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
(3) If the lessor justifiably withholds or stops delivery of goods because of the lessee‘s default or insolvency (KRS 355.2A-525 or 355.2A-526), the lessee is entitled to restitution of any amount by which the sum of his 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, twenty percent (20%) 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 such amount or five hundred dollars ($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 article 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.
Effective: January 1, 1991
History: Created 1990 Ky. Acts ch. 363, sec. 51, effective January 1, 1991.