North Dakota Code 41-02.1-52 – (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 a 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.
Terms Used In North Dakota Code 41-02.1-52
- 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.
- 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
- Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
2. If the lease agreement provides for liquidation of damages, and the provision does not comply with subsection 1, or the 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 (section 41-02.1-73 or 41-02.1-74), 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 under subsection 1; or
b. In the absence of those terms, twenty 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 five hundred dollars.
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.