Tex. Bus. & Com. Code § 2.718 · Subchapter G. REMEDIES
LIQUIDATION OR LIMITATION OF DAMAGES; DEPOSITS.
Text — Current through the 89th 2nd Called Legislative Session, 2025
(a) 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 non-feasibility of otherwise obtaining an adequate remedy. A term fixing unreasonably large liquidated damages is void as a penalty.
(b) 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 (a), or
(2) in the absence of such terms, twenty percent of the value of the total performance for which the buyer is obligated under the contract or $500, whichever is smaller.
(c) The buyer's right to restitution under Subsection (b) 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 (a), and
(2) the amount or value of any benefits received by the buyer directly or indirectly by reason of the contract.
(d) 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 (b); 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).
Notes and commentary — not statutory text
History
Acts 1967, 60th Leg., p. 2343, ch. 785, Sec. 1, eff. Sept. 1, 1967.
Source of truth
- Edition
- Current through the 89th 2nd Called Legislative Session, 2025
- Official file
- https://statutes.capitol.texas.gov/Docs/BC/htm/BC.2.htm
- Text hash
- sha256 ac8856f82e92da19f1086675596d102c54be25bbc5342f8e83abc2b2ea018b6a
- Composed by
- compose_tx.py 2026-10-05: the Legislative Council's chapter files read in document order; verify_tx.py's independent reading (lxml DOM walk) agrees character for character
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