North Carolina General Statutes 25-2A-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 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) 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 Article.
(3) If the lessor justifiably withholds or stops delivery of goods because of the lessee‘s default or insolvency (N.C. Gen. Stat. § 25-2A-525 or N.C. Gen. Stat. § 25-2A-526), the lessee is entitled to restitution of any amount by which the sum of his payments exceeds:
(a) the amount to which the lessor is entitled by virtue of terms liquidating the lessor’s damages in accordance with subsection (1) of this section; or
(b) in the absence of those terms, twenty percent (20%) 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 ($500.00).
(4) A lessee’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. (1993, c. 463, s. 1.)
Terms Used In North Carolina General Statutes 25-2A-504
- 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, if the total payments to be made under the lease contract, excluding payments for options to renew or buy, do not exceed twenty-five thousand dollars ($25,000). See North Carolina General Statutes 25-2A-103
- 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 (N. See North Carolina General Statutes 25-2A-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 North Carolina General Statutes 25-2A-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 North Carolina General Statutes 25-2A-103
- Lessor: means a person who transfers the right to possession and use of goods under a lease. See North Carolina General Statutes 25-2A-103
- Restitution: The court-ordered payment of money by the defendant to the victim for damages caused by the criminal action.