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Liquidated Damages/Foreclosure Sale

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Costal Leasing Corporation v. T-Bar S Corporation, 128 N.C. App. 379 496 S. E. 2d 795 (1998). LIQUIDATED DAMAGES/FORECLOSURE SALE. The North Carolina court upheld the liquidated damages clause under pre-UCC Article 2A law but reached the unusual conclusion that the Lessor could not purchase the equipment at a public sale. Apparently, the court was under the impression that the Lessor, as it was already the owner of the equipment, could not "purchase" at a "sale". Lessors doing business in North Carolina may want to study this case closely.

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