O.C.G.A. § 11-2-718 (2019)
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) of this Code section; or (b) In the absence of such terms, 20 percent of the value of the total performance for which the buyer is obligated under the contract or $500.00, whichever is smaller. (3) The buyer’s right to restitution under subsection (2) of this Code section 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) of this Code section; 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) of this Code section; 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 (Code Section 11-2-706).
History
Code 1933, § 109A-2-718, enacted by Ga. L. 1962, p. 156, § 1.
Annotations
Law reviews. For comment on Felder v. Neeves, 36 Ga. App. 41, 135 S.E. 219 (1926), see Ga. L. Rev. No. 1 P. 51 (1927). For article, “Consumer Protection Against Sellers Misrepresentations,” see 20 Mercer L. Rev. 414 (1969). For note, “Buyer’s Right to Revoke Acceptance Against the Automobile Manu-
facturer for Breach of its Continuing Warranty of Repair or Replacement,” see 7 Ga. L. Rev. 711 (1973). For article discussing the applicability of warranty provisions under the Uniform Commercial Code to domestic solar energy devices, see 30 Mercer L. Rev. 547 (1979). For comment, “Refocusing Liquidated Damages Law for Real Estate Contracts: Returning to the Historical Roots of the Penalty Doctrine,” see 39 Emory L.J. 267 (1990).
JUDICIAL DECISIONS Repurchase offer agreed to as part of agreement. - Where it was determined that parties had agreed upon re-
purchase offer of seller in event of dissatisfaction of buyer as part of enforceable agreement, enforcement of such offer was
reasonable measure of recovery under O.C.G.A. § 11-2-718(1). All-Co Drainage & Bldg. Prods., Inc. v. Umstead Enters.,
Inc., 123 Ga. App. 244, 180 S.E.2d 250, 1971 Ga. App. LEXIS 1179 (1971).
RESEARCH REFERENCES Am. Jur. 2d. 63 Am. Jur. 2d, Products Liability, § 659 et seq. 67A Am. Jur. 2d, Sales, §§ 894-903. Am. Jur. Pleading and Practice Forms. 6 Am. Jur. Pleading and Practice Forms, Commercial Code, § 2:790. C.J.S. 25 C.J.S., Damages, § 113. U.L.A. Uniform Commercial Code (U.L.A.) § 2718. ALR. Effect of stipulation for return of deposit or advance payment if the order is not accepted, 1 A.L.R. 1513. A provision in land contract for pecuniary forfeiture or penalty by a party in default as affecting the right of the other party to specific performance, 32 A.L.R. 584; 98 A.L.R. 877. Provision in land contract for pecuniary forfeiture or penalty upon default of the
purchaser as affecting the vendor’s right to maintain an action for the purchase price, 32 A.L.R. 617. Validity and effect of provision in contract of sale, with reservation of title, for collection of unpaid purchase money after retaking the property, 43 A.L.R. 1243. Provision for liquidated damages in contract for sale of goods, 138 A.L.R. 594. Necessity of buyer’s actual knowledge of disclaimer of warranty of personal property, 160 A.L.R. 357. Contractual liquidated damages provisions under UCC Article 2, 98 A.L.R.3d 586. Modern status of defaulting vendee’s right to recover contractual payments withheld by vendor as forfeited, 4 A.L.R.4th 993. Contractual provision for per diem payments for delay in performance as one for liquidated damages or penalty, 12 A.L.R.4th 891.