§490:2-718  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), or



(b) In the absence of such terms, twenty per cent of
the value of the total performance for which the buyer is obligated under the
contract or $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:



(a) A right to recover damages under the provisions
of this article other than subsection (1), 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); 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 (section 490:2-706). [L 1965, c 208, §2-718; HRS §490:2-718]