Massachusetts General Laws ch. 106 sec. 2-718 – Liquidation or Limitation of Damages; Deposits
Section 2–718. (1) 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 non-feasibility of otherwise obtaining an adequate remedy. A term fixing unreasonably large liquidated damages is void as a penalty.
Terms Used In Massachusetts General Laws ch. 106 sec. 2-718
- Buyer: means a person who buys or contracts to buy goods. See Massachusetts General Laws ch. 106 sec. 2-103
- 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.
- Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
- Seller: means a person who sells or contracts to sell goods. See Massachusetts General Laws ch. 106 sec. 2-103
(2) 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 payments exceeds
(a) the amount to which the seller is entitled by virtue of terms liquidating the seller’s damages in accordance with subsection (1); or
(b) in the absence of such terms, twenty per cent of the value of the total performance for which the buyer is obligated under the contract or five hundred dollars, whichever is smaller.
(3) The buyer’s right to restitution under subsection (2) is subject to offset to the extent that the seller 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 buyer directly or indirectly by reason of the contract.
(4) 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 (2); 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 2–706).