Mississippi Code

Miss. Code Ann. § 75-2-718 (2026)

Liquidation or limitation of damages; deposits

✓ current as of July 2026

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(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 exceed
- (a) the amount to which the seller 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 (20%) of the value of the total performance for which the buyer is obligated under the contract or five hundred dollars ($500.00), 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 chapter other than subsection (1), and
- (b) the amount of 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 chapter on resale by an aggrieved seller (Section 2-706) [Section 75-2-706].

Codes, 1942, § 41A:2-718; Laws, 1966, ch. 316, § 2-718, eff. 3/31/1968.

Notes of Decisions

Cited in 4 cases, 2007–2018 · leading case: Thomas v. Scarborough, 977 So. 2d 393 (Miss. Ct. App. 2007).

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Thomas v. Scarborough, 977 So. 2d 393 (Miss. Ct. App. 2007). · cites it 2× “(quoting Miss.Code Ann. § 75-2-718). The court reversed and remanded to the chancellor to determine "the damages actually sustained by" Glindmeyer.”

Culbreath Revocable Trust v. Sanders, 979 So. 2d 704 (Miss. Ct. App. 2007). “at 301 (quoting Miss.Code Ann. § 75-2-718 (1972)). ¶ 28. The liquidated damages in Maxey were set at $75,000.”

Richard Garziano, Sr. v. Louisiana Log Home, 569 F. App'x 292 (5th Cir. 2014). · cites it 2× “Miss.Code Ann. § 75-2-718(1) ("A term fixing unreasonably large liquidated damages is void as a penalty.”

Jerome Henderson v. Roosevelt Blount, 247 So. 3d 328 (Miss. Ct. App. 2018). “Miss. Code Ann. § 75-2-718 (Rev. 2016); Culbreath Revocable Tr.”

— Miss. Code Ann. § 75-2-718(1) — 2 cases

Thomas v. Scarborough, 977 So. 2d 393 (Miss. Ct. App. 2007). “(quoting Miss.Code Ann. § 75-2-718). The court reversed and remanded to the chancellor to determine "the damages actually sustained by" Glindmeyer.”

Richard Garziano, Sr. v. Louisiana Log Home, 569 F. App'x 292 (5th Cir. 2014). “Miss.Code Ann. § 75-2-718(1) ("A term fixing unreasonably large liquidated damages is void as a penalty.”

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