California Commercial Code 10504 – (a) Damages payable by either party for default, or any other …
(a) 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 the lessor‘s residual interest, may be liquidated in the lease agreement subject to and in compliance with § 1671 of the Civil Code.
(b) If the lease agreement provides for liquidation of damages, and such provision does not comply with subdivision (a), remedy may be had as provided in this division.
Terms Used In California Commercial Code 10504
- agreement: means the total legal obligation that results from the parties' agreement as determined by this code and as supplemented by any other applicable laws. See California Commercial Code 1201
- 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 California Commercial Code 10103
- 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 (Section 10309), but the term does not include money, documents, instruments, accounts, chattel paper, general intangibles, or minerals or the like, including oil and gas, before extraction. See California Commercial Code 10103
- 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 California Commercial Code 10103
- Lessee: means a person who acquires the right to possession and use of goods under a lease. See California Commercial Code 10103
- Lessor: means a person who transfers the right to possession and use of goods under a lease. See California Commercial Code 10103
- Present value: means the amount as of a date certain of one or more sums payable in the future, discounted to the date certain. See California Commercial Code 10103
- Remedy: means any remedial right to which an aggrieved party is entitled with or without resort to a tribunal. See California Commercial Code 1201
- Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
- Right: includes remedy. See California Commercial Code 1201
- Term: means a portion of an agreement that relates to a particular matter. See California Commercial Code 1201
(c) If the lessor justifiably withholds or stops delivery of goods because of the lessee‘s default or insolvency (Section 10525 or 10526), the lessee is entitled to restitution of any amount by which the sum of his or her payments exceeds:
(1) The amount to which the lessor is entitled by virtue of terms liquidating the lessor’s damages in accordance with subdivision (a); or
(2) In the absence of those terms, 20 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 five hundred dollars ($500).
(d) A lessee’s right to restitution under subdivision (c) is subject to offset to the extent the lessor establishes:
(1) A right to recover damages under the provisions of this division other than subdivision (a); and
(2) The amount or value of any benefits received by the lessee directly or indirectly by reason of the lease contract.
(Amended by Stats. 1991, Ch. 111, Sec. 42. Effective July 15, 1991.)