The Analysis Of 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. Otherwise, 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 thesis, besides the introduction and epilogue, consists of three parts. Part I The Value Goals of Compensation System for Breach of Contract—Protection and Incentive. First, the compensation system for breach of contract is to protect the victim of a breach of contract. The victim should be placed in the same situation as if the contract had been performed. On the base of this, the remedy system also provides incentives to both the parties. The'efficient breach'makes the value goal of the compensation for breach of Contract modified. It leaves the logic focus of the compensation system for breach of contract from the victims to the one who breaches, which in some extent weaken the protection to the victims. In the author's opinion, the theory of'efficient breach'doesn't deny the value goal of compensation for breach of contract. Actually it takes'efficient'as a criterion to try to realize a balance protection for involved two parties and public interests. In this part, the author deals with the jurisprudence of the'efficient breach', the relationship between'efficient breach'and the coercive performance. At the last, the author sets forth his suggestions of how to make use of the'efficient breach theory'to perfect the Contract Law. Part II The Applying Premise of Compensation for Breach of Contract. The applying premise of compensation for breach of contract consists of act of breach of contract, damage and cause in fact. In this part, the author mainly requires into the categories of damage, including material damage and non-material damage, expectation interests, reliance interests and restitution interest, damage suffered and profit lost, direct losses and indirect losses. As for the causation, the author thinks only cause in fact is the causation in the original meaning. Part III How to Determine the Scope of Compensation for Breach of Contract. In this part, the author points out that theprinciple of full compensation is not unlimited. It is also subject to the restrictive rules. All of those, the rule of foreseeability and the rule of mitigation are basic restrictive measures. 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 breach of contract.