Studies On Compensation System For The Breach Of Contract

Compensation system for the breach of contract is the core of the Contract Law. The Contract Law of P.R.C.drawing lessons from the achievements of other countries,makes it regulated.But the rules and regulations are too simple to operate in the judicial Practice effectively. More and more problems arise from Practice.which need explanation in theory. In view of these facts,compensation for breach of contract is a topic worth making a further study on. This article just tends to study it as an attempt. The purpose of this essay is to study the theoretical problems on the breach of contract. Compensation is the most important remedy for breach of contract.From the essay,we can find out that the idea of compensation system for the breach of contract is protection and incentive.First,the rules governing damages are primarily concerned with protecting the victim of a breach of contract by giving him fair compensation. The victim is entiltled to compensation for any loss, which results from the breach. He is to be placed in the same situation as if the contract had been preformed.At the same time,however,the rules provide incentives to both the parties. They are encouraged when making the contract to disclose the risk of any unusual loss, so that the most efficient method for performing may be adopted,they are encouraged to peform the contract once it has been made;and if a breach does occur, the victim is encouraged to avoid unnecessary waste or loss. The thesis,beside the introduction , consists of five parts. The first part of this essay is on the original idea of damages for breach of contract. From this part the write concludes that the main purpose of damages for breach of contract is to compensate the victim's loss but not to punish the party in breach. The second part is on the elements of damages for breach of contract,which include loss and causation. It is difficult to give an exact concept to'loss'. the author mainly requires into categories of damage,　including material damage and non-material damage,direct losses and indirect losses ,　expectation interests, reliance interest and restitution　interest .We have several kinds of theory on causation of damages,the author thinks only cause in fact is the causation in the original meaning.　The third part is on the principle of full compensation. A full compensation does not mean not to limit the extent of damages.There are five rules under this principle.All of those ,the rule of foreseeabiliy is the basic restrictive measure.In additional, the rule of mitigation,the rule of counterbalance between loss and profit,and the rule of contributory negligence are all beneficial to restrict the range of compensation for the breach of contract. The fourth part is about the rule of mitigation,the rule of counter balance between loss and profit and the rule of contributory negligence,focus on their meaning,basis and function.The full compensation is also subject to the restrictive rule. The fifth part 　is　the 　conclusion of this essay.