Ark. Code Ann. » Title 4 Chapter 02
Arkansas Code Annotated

Ark. Code Ann. § 4-2-718 (2026)

Liquidation or limitation of damages — Deposits

✓ current as of May 2026
Find cases: SyfertCases citing this section JustiaArk. Code CornellLII Search CasesGoogle Scholar
  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
    1. the amount to which the seller is entitled by virtue of terms liquidating the seller's damages in accordance with subsection (1); or
    2. in the absence of such terms, twenty percent (20%) of the value of the total performance for which the buyer is obligated under the contract or five hundred dollars ($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
    1. a right to recover damages under the provisions of this chapter other than subsection (1); and
    2. 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 purpose 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 chapter on resale by an aggrieved seller (§ 4-2-706).

History. Acts 1961, No. 185, § 2-718; A.S.A. 1947, § 85-2-718.

Research References

Ark. L. Rev.

Unconscionable Contracts and the Uniform Commercial Code, 20 Ark. L. Rev. 165.

Chaney, Comments: Utilization of Disclaimer of Warranty Clauses Under the UCC, 32 Ark. L. Rev. 772.

Case Notes

Cited: Wawak v. Stewart, 247 Ark. 1093, 449 S.W.2d 922 (1970); Dessert Seed Co. v. Drew Farmers Supply, Inc., 248 Ark. 858, 454 S.W.2d 307 (1970).

Notes of Decisions
Cited in 3 cases (1 in the last 5 years), 1993–2023 · leading case: Bowen v. Gardner, 425 S.W.3d 875 (Ark. Ct. App. 2013).
Sort: Relevance Newest Treatment
Bowen v. Gardner, 425 S.W.3d 875 (Ark. Ct. App. 2013). · cites it 2× “Gardner filed a complaint seeking recovery of the down payment and raising claims of unjust enrichment, breach of contract, and statutory restitution pursuant to Arkansas Code Annotated section 4-2-718. B & C answered, contending that it had an express agreement for the purchase…”
Jackson v. Swift-Eckrich, 830 F. Supp. 486 (W.D. Ark. 1993). “for breach of warranty can be limited in accordance with the provisions of this chapter on liquidation or limitation of damages and on contractual modification of remedy (§§ 4-2-718, 4-2-719). “[T]his provision applies to attempts to modify (for example by setting a time limit)…”
Pepper Source, LTD. v. Ozone LLC (W.D. Ark. 2023). · cites it 14× “See Ark. Code Ann. § 4-2-718 . Ozone Solutions suggests subsection two applies: (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…”
— Ark. Code Ann. § 4-2-718(2) — 1 case
Pepper Source, LTD. v. Ozone LLC (W.D. Ark. 2023). “See Ark. Code Ann. § 4-2-718 . Ozone Solutions suggests subsection two applies: (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…”
Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.