Damages For Loss Of Expectation Benefit Upon The Termination Of The Contract

Damages of breach of contract and termination of the contract are both very important legal systems of Contract Law of People's Republic of China and are both applicable under the Contract Law, which is referred to as damages of termination of the contract. This article tries to answer the following question, which is, if a contract is terminated by breach of contract, whether the non-breaching party has the right to recover money damages from the other party and if yes, how to define the scope of damages and to calculate the loss of expectation benefit.In this article, the author thinks the damages used in Contract Law of People's Republic of China do not include the damages for loss of expectation benefit only, but also include the damages for failing to perform the contract, because in case of breach of contract, the injured party shall bear the loss from the other party not to perform the obligation under the contract as well as the loss of expectation benefit. For this reason, that the breaching party only covers the loss of expectation benefit is not sufficient to the non-breaching party, neither is in accordance with the legislative purpose of the Contract Law. In order to offer the non-breaching party sufficient remedies, damages used in the Contract Law shall include the damages occurred by termination of the contract and the damages resulting from not to performing the contract, which shall includes the direct damages and damages for the loss of the expectation benefit. Based on and applicable law and judicial practice, this article illustrates the scope of damages and the calculation method of the loss of expectation benefit and make some suggestion for how to establish and perfect the legal system of damages of terminating the contract.