Study On The Legal Interference With Damages For Breach Of The Contract

According to the freedom of contract, the parties may stipulate the amount and the condition of payment of the damages for breach of the contract in a contract. But in certain condition the agreed damages for breach of the contract should be legally interfered with. The legal interference with the agreed damages for breach of the contract is the development trend of the Contract Law in many countries. In the Continental Law the legal interference with the agreed damages for breach of the contract refers to the increase or reduction of the amount of it. hi the Anglo-American Law it refers to the negation of the penalty. The legal interference with the agreed damages for breach of the contract doesn't negate the freedom of contract principle in the Contract Law. It is the conclusion to give consideration to both freedom and justice, both efficiency and impartiality. In the Contract Law of our country the legal interference with the agreed damages for breach of the contract includes legislative interference and judicial interference. The legislative interference refers to the restriction of the application of the agreed damages for breach of the contract, for example the deposit and the damages for breach of the contract can't be applied simultaneously. The judicial interference refers to the interpretation of contract or the modification of the amount of the damages for breach of the contract. If the agreed amount of damages for breach of the contract is less than the damages resulting therefrom, the party concerned may appeal to a people's court or an arbitration organization for an increase. If the agreed amount of damages for breach of the contract is much more than the damages resulting therefrom, the party concerned may appeal to a people's court or an arbitration organization for an appropriate reduction. The legal interference with the agreed damages for breach of the contract should defer to the purpose of the parties. The court or the arbitration organization should only have limited power.