2006 New York Code - Liquidation Or Limitation Of Damages; Deposits.

 
  Section 2--718. Liquidation or Limitation of Damages; Deposits.
    (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'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'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'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
             Article 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's breach before reselling goods received in part performance,  his
  resale  is subject to the conditions laid down in this Article on resale
  by an aggrieved seller (Section 2--706).