Title 11, Chapter 2, Section 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)
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
(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).