An Research On The System Of Punitive Damage Compensation

Along with the development of society the economy of china becomes more prosperous, commodity transaction has activated the market as well as enterprises. However, as with all the new-born things, market economy has two sides. Protection of consumers' rights and interests is one of the important aspects. Consumer is the leading force of market economy, Demand decides supply. At the same time, consumers are the vulnerable groups in the market economy. In terms of each consumer He or she in disadvantage position compared to manufacturers and distributors in the commodity transaction. Consumers are in the passive position, which makes their very cautious and fearing that fooled when they purchase commodities or receive services. In recent years, the problems of violating consumer's rights and interests get more and more serious, and the serious situation and the lack of protection provide an excellent opportunity for the enhancement of consumer protection legislation and establishment of independent punitive damages compensation rights. " Law of the People's Republic of China on the Protection of Consumers' Rights and Interests" came out, in which Article 49 prescripts the punitive damage compensation system was put forward at the first time. Thelaw protects the legal rights of consumers and encourages them to fight against the dishonest distributos; what's more, Law of the People's Republic of China on the Protection of Consumers' Rights and Interests prevents distributors from benning involved in the crime and provides the legal basis for the healthy and orderly running of market economy, which is of great practical significance. This paper intends to analyse the precondition ,condition and scope of application of 49th clause in Law of the People's Republic of China on the Protection of Consumers' Rights and Interests, Meanwhile, this paper tries to focus on the Punitive Damage Compensation in parctice Article 49 and then put forward some suggestions for the perfections of this Article from the legal system perspective in order to make contributions to the establishment of Law of the Protection of Consumers' Rights and Interests.This paper is composed of four parts. The first part introduces the concepts, nature and function of Punitive Damage Compensation in Article 49 of the Law of the Protection of Consumers' Rights and Interests. The essence of the 49th clause is Punitive Damage Compensation, which means that the amount of compensation by law is more than damages. Firstly, a statement of the origin of Punitive Damage Compensation is made through the analysis of its definition. Punitive Damage Compensation has two functions: one is to compensate victims in excess of actual damages, the other is to lay a penalty on the offender and stunt the guilt, maintaining the order of market competition and social economy.The second part analyzes the applicable preconditions, conditions and scope of Punitive Damage Compensation in Article 49 of the Law of the Protection of Consumers' Rights and Interests from judicial perspective. The applicable prerequisite of Article 49 is the existence of marketers' deceptive activities. There are four conditions: the main part of the right must be the consumers; distributors' deceptive activities; consumers suffering from damages and consumers requests for the punitive damage compensation. Main parts of the application are the distributor who acts the fraud and the consumer who suffers the loss in the commodity transaction. The trade applicable scope is the specific commodity transaction or the specific service transaction. The duty and liability of applicable scope is established on the basis of the contract relationship and affected relationship.The third part mainly describes Punitive Damage Compensation in Article 49 of the Law of the Protection of Consumers' Rights and Interests.The author point out unreasonable contents of Punitive Damage Compensation in this clause from the practical aspects. One is that the statement and logic are not clear; second is that the scope of the protection is too narrow, which is only apply to infringement dispute; third is that this rules only requests double indemnity,which is lack of flexibility; forth is that the base of penalty multiples is unreasonable.Article 49 the base of penalty multiples is the price of commodity and the cost of the service, but in most situations, the price of commodity and service are not equal to the actual loss of the victims; fifth is that rhere are some flaws in the practical usage .It also describes Punitive Damage Compensation in Article 49 of Law of the Protection of Consumers' Rights and Interests from the practical usage of product liability, breach of duty and the sale of real estate.The forth part is about the enhancement of the system of Punitive Damage Compensation in Article 49 of Law of the Protection of Consumers' Rights and Interests. In order to make the system more operational in practice, author proposes some suggestions :one is that the application of punitive damages conditions should be cleared and the scope of consumers and the bebaviors of should be defined fraud; second is to severely punish those who violate the law and regulate the base of penalty and base of penalty multiples reasonably; third is to expand the scope for Article 49 of Law of the Protection of Consumers' Rights and Interests, providing a more measures to protect the consumers; forth is to establish the system of Punitive Damage Compensation in the infringement relations; fifth is to improve the consumers' self-protection capability; sixth is that China should establish the Punitive Damage Compensation in the civil code in order to meet the needs of all kinds of consumers in different fields in the market economy.