ORS 72.7180¹
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 the buyer’s 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 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, whichever is smaller.

(3) The buyer’s right to restitution under subsection (2) of this section 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) of this 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 section; but if the seller has notice of the buyer’s breach before reselling goods received in part performance, the resale is subject to the conditions laid down in ORS 72.7060 (Seller’s resale including contract for resale) on resale by an aggrieved seller. [1961 c.726 §72.7180 (Liquidation or limitation of damages)]

Notes of Decisions

Liquidated damages pro­vi­sion of this sec­tion may apply in analyzing validity of liquidated damages pro­vi­sions in contracts in general. Illingworth v. Bushong, 297 Or 675, 688 P2d 379 (1984)

Provision in exclusive sales agree­ment calling for sales com­mis­sion of 10 percent of sales price “in the event of any sale, contract to sell or exchange or conveyance of said [real] prop­erty by [seller] during the life of this contract or renewal or extension thereof” is not liquidated damages clause but clause that is enforceable in ac­tion for debt owed under contract. DiTommaso Realty, Inc. v. Moak Motorcycles, Inc., 309 Or 190, 785 P2d 343 (1990)

Chapter 72

Law Review Cita­tions

53 OLR 468-473 (1974); 58 OLR 545 (1980)

1 Legislative Counsel Committee, CHAPTER 72—Sales, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors072.­html (2019) (last ac­cessed May 16, 2020).
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2019, Chapter 72, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano072.­html (2019) (last ac­cessed May 16, 2020).
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent. Currency Information