                                 CODE OF VIRGINIA

LIQUIDATION OR LIMITATION OF DAMAGES; DEPOSITS (§ 8.2-718)

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 nonfeasibility of otherwise obtaining an adequate remedy. A
term fixing unreasonably large liquidated damages is void as a penalty.

2. Where the seller justifiably withholds delivery of goods because of the
buyer&#8217;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&#8217;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 $500,
   whichever is smaller.

3. The buyer&#8217;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 title 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&#8217;s breach before
reselling goods received in part performance, his resale is subject to the
conditions laid down in this title on resale by an aggrieved seller (&#xA7;
8.2-706).

HISTORY: 1964, c. 219.