Study On The Liquidated Damages For Breach Of Contract

Based on the theoretical foundation of the liquidated damages for breach of contract and its specific application, hoping that people understand it from a new perspective. This paper is divided into three parts to discuss:Part I is about the basic theory of default payments. Firstly, the concept of liquidated damages for breach of contract, which is agreed upon by the parties directly or by the provisions of the law, one party does not perform the contract or does not completely fulfill the contract, the other party to pay a certain amount of money or other benefits. Secondly, the three theories about the nature of liquidated damages for breach of contract: the security, the responsibility and the compromise. I believe that the civil liability is the nature of the liquidated damages for breach of contract. Again, the function of the liquidated damages for breach of contract, it both has compensation and punitive, the compensation is the main function and the punitive is the junior function. Which function is decided by the clients. If the clients don't decide the function, it will be considered the compensation function.Part II is about the relation between the penalty and responsibility .Firstly, penalty and the actual performance can be used at the same time. Secondly, the penalty and the damages can not be used simultaneously. Finally, the contract law of our country stipulate that the penalty and the deposit can be used alternatively, this stipulates is not proper, the relationship of both should be analysis concretely.Part III is the amount of adjustment of the liquidated damages for breach of contract. Its adjustment should follow the two legal basis: the freedom of contract and the equity interests of the each party. The liquidated damages for breach of contract executives national intervention, the amount of adjustment should refer to all kinds of factors to balance the interests of both sides.