(1) the deposit can serve as liquidated damages if the K so provides, within certain limits.
(2) when a deposit is given and there is no liquidated damages provision, the seller may keep 20% of the K price or $500, whichever is less. HOWEVER, if actual damages are more, the seller may collect actual damages rather than the statutory amount.
- Two Measures of Actual Damages:
- (1) traditional expectancy damages (resale price minus K price); OR
- (2) when the seller is a dealer and the traditional measure of damages is inadequate to put him in as good a position as he would be in if the sale went through, then the measure of damages is lost profit.
NOTE** even a defaulting party has the right to recover a portion of the deposit back in restitution if the amt of the deposit exceeds the K damages to which the non-defaulting party is entitled.