2010 Pennsylvania Code
Title 13 - COMMERCIAL CODE
Chapter 27 - Remedies
2718 - Liquidation or limitation of damages; deposits.

     § 2718.  Liquidation or limitation of damages; deposits.
        (a)  Liquidated damages in agreement.--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.
        (b)  Right of buyer to restitution.--Where the seller
     justifiably withholds delivery of goods because of the breach of
     the buyer, the buyer is entitled to restitution of any amount by
     which the sum of his payments exceeds:
            (1)  the amount to which the seller is entitled by virtue
        of terms liquidating the damages of the seller in accordance
        with subsection (a); or
            (2)  in the absence of such terms, 20% of the value of
        the total performance for which the buyer is obligated under
        the contract or $500, whichever is smaller.
        (c)  Offset.--The right of the buyer to restitution under
     subsection (b) is subject to offset to the extent that the
     seller establishes:
            (1)  a right to recover damages under the provisions of
        this division other than subsection (a); and
            (2)  the amount or value of any benefits received by the
        buyer directly or indirectly by reason of the contract.
        (d)  Payment in goods.--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 (b);
     but if the seller has notice of the breach of the buyer before
     reselling goods received in part performance, his resale is
     subject to the conditions laid down in this division on resale
     by an aggrieved seller (section 2706).

        Cross References.  Section 2718 is referred to in sections
     2316, 2601, 2719 of this title.