N.Y. Uniform Commercial Code 2-A-504 – Liquidation of Damages
Section 2-A-504. Liquidation of Damages.
Terms Used In N.Y. Uniform Commercial Code 2-A-504
- 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.
- Goods: means all things that are movable at the time of
identification to the lease contract, or are fixtures
(Section 2-A-309), 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 N.Y. Uniform Commercial Code 2-A-103 - 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 N.Y. Uniform Commercial Code 2-A-103 - 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
- Lessee: means a person who acquires the right to possession
and use of goods under a lease. See N.Y. Uniform Commercial Code 2-A-103 - Lessor: means a person who transfers the right to possession
and use of goods under a lease. See N.Y. Uniform Commercial Code 2-A-103 - Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.
(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'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), 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 Article.
(3) If the lessor justifiably withholds or stops delivery of goods because of the lessee's default or insolvency (Section 2-A-525 or 2-A-526), the lessee is entitled to restitution of any amount by which the sum of his or her payment exceeds:
(a) the amount to which the lessor is entitled by virtue of terms
liquidating the lessor's damages in accordance with
subsection (1); or
(b) 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 $500.
(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
Article 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.