                                 CODE OF VIRGINIA

LIQUIDATION OF DAMAGES (§ 8.2A-504)

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&#8217;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) of this section, 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 title.

3. If the lessor justifiably withholds or stops delivery of goods because of the
lessee&#8217;s default or insolvency, under § 8.2A-525 or § 8.2A-526, the
lessee is entitled to restitution of any amount by which the sum of his or her
payments exceeds:

   a. The amount to which the lessor is entitled by virtue of terms liquidating
   the lessor&#8217;s damages in accordance with subsection (1) of this section;
   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 such amount or $500.

4. A lessee&#8217;s right to restitution under subsection (3) of this section 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) of this section; and

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

HISTORY: 1991, c. 536.