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Can you summarize MNST 336.2A-504?
UNIFORM COMMERCIAL CODE > LIQUIDATION OF DAMAGES.
Short Summary
This legal document, part of the Minnesota Statutes under the Uniform Commercial Code, governs the liquidation of damages in lease agreements. It allows for the inclusion of provisions in lease agreements that determine the amount or formula for damages payable by either party in case of default or other acts or omissions. However, these provisions must be reasonable in light of the anticipated harm caused by the default or act. If the lease agreement includes a provision for liquidation of damages that does not comply with the reasonableness requirement or fails in its essential purpose, remedies can be sought as provided in this article. Additionally, if the lessor justifiably withholds or stops delivery of goods due to the lessee’s default or insolvency, the lessee is entitled to restitution of any excess amount paid, subject to certain conditions. The lessee’s right to restitution is subject to offset if the lessor can establish a right to recover damages under other provisions of this article and the value of any benefits received by the lessee. No specific penalties are mentioned in this document.
Whom does it apply to?
Lessors and lessees in lease agreements
What does it govern?
Liquidation of damages in lease agreements
What are exemptions?
No exemptions are mentioned.
What are the Penalties?
No specific penalties are mentioned.
Jurisdiction
Minnesota