The Definition And Application Of Penalty

Liquidated damages liability for breach of contract law is an important institutional arrangements, the issue of liquidated damages not only has a certain theoretical value, but also has obvious practical significance. And there have been a penalty and scholars to explore and study one of the key elements of contract law. In the past, due to Two Schools of different points of view, the socialist planning of national legislation such as the impact of the theoretical circles there is always some differences. China's current contract law after the enactment of laws to eliminate duplication between the contract and even contradictory phenomena, as well as scattered and messy state. In the "Contract Law" section 114 of the important ways of liability for breach of contract - to pay liquidated damages done a uniform legal provisions: "the parties may agree to a party defaults should be based on breach of contract to the other party to pay a certain amount of liquidated damages can also be agreed upon by damages for breach of contract resulting from the calculation. less than the agreed liquidated damages for losses caused by, the parties may request the people's court or arbitration body to be increased; the agreed liquidated damages is higher than the losses caused by excessive, the parties may request the people's court or arbitration agencies to be reduced appropriately. the parties agreed on the delay, liquidated damages, the defaulting party, after payment of liquidated damages, it shall perform the debt." However, due to the textual representation of this provision that there are not very clear and the phenomenon of incomplete, people can easily apply these provisions ambiguous. Different scholars based on its own understanding of the basic theory of law, in reference to Two Schools on the basis of legislation put forward its own views, and has appeared in a number of published books and publications being. Can be seen, the differences have not been solved at all. The correct definition of liquidated damages solve the theoretical basis for differences is also key to the reunification of justice.This paper is divided into four parts.The first part is an overview of default fund system. This paper first describes the development of the system evolution liquidated damages. Second, define the concept of liquidated damages. Contract Law in China is well known, and no liquidated damages provisions of a clear definition, according to China's "Contract Law" 114th article, "the parties may agree to a party defaults should be based on breach of contract to the other party to pay a certain amount of liquidated damages can also be agreed liquidated damages for breach of contract resulting from the method of calculating the amount. "Civil Law" 112th second paragraph of Article also provides that "the parties may agree in the contract, one party for breach of contract, to the other party to pay a certain amount of liquidated damages can also be agreed in the contract for breach of contract arising from the method of calculating the amount of damages. "This is clearly a breach of contract payment is prior agreement of the parties, a party breach of contract, to the other party to pay a certain amount of money for features. Therefore, according to the legislative provisions and judicial practice, we have the concept of liquidated damages were summarized as follows: breach of contract payments are determined in advance, in breach of contract after the date of independence from outside the payment performance. Manifested in its legal characteristics: First, the amount of liquidated damages primarily by the parties and a pre-determined by prior agreement, which fully embodies the spirit of freedom of the parties to the contract; second, breach of contract payment is agreed upon by the parties after the one in the default the direction of the other party to pay a sum of money; and third, the payment of liquidated damages is independent of paid outside the discharge behavior; Fourth, the payment of liquidated damages is a breach of contract liability. This chapter discusses the final penalty functions. With regard to liquidated damages the main functions of the academic community there are several different points of view, this paper that the penalty is both a breach of contract liability, but also a unique way of security.The second part is the nature of liquidated damages study. It has always been about the nature of liquidated damages in dispute is generally believed that in the nature of liquidated damages for compensation of breach of contract payments are divided into a punitive penalty. This section first introduces the damages and the punitive nature of liquidated damages of liquidated damages the criteria for determining the compensation of breach of contract by payment of liquidated damages and the punitive nature of a comparative analysis that the two have three different. First of all, the amount of point of view, due to punitive penalty set up, does not consider the breach of contract may cause the actual loss, therefore, the amount of bound does not correspond exactly with the actual loss amount exceeds the actual loss does not affect the validity; while compensatory liquidated damages when it is established taking into account the possible breach of contract caused by the actual loss, but also in the compensation provisions are too high, the court should be based on actual amount of loss caused by breach of contract to make the appropriate reduction. Second, because the compensation of liquidated damages to compensate for the losses caused by post-default and therefore the victim of breach of contract claim for payment of compensation payment, the debtor can not be a request for compensation for the loss; and punitive liquidated damages to punish the victim of breach of contract claim for payment After payment, you can also claim compensation for damages. Third, the compensatory payment of liquidated damages to consider the actual loss, if the breach did not cause actual loss, then the right to seek relief for breach of contract the parties; and punitive liquidated damages mainly the fault of constituent elements, application of liquidated damages to be punitive and fault liability harmonized with the requirements generally do not take into account the actual losses. The last part is the nature of liquidated damages analysis, this paper should be recognized that the liquidated damages punitive and compensatory double nature, but should be the main compensatory liquidated damages, punitive liquidated damages supplement.The third part is liquidated damages and other liability for breach of comparison. This section starting from the breach of the other responsibilities, focusing on the liquidated damages and damages, specific performance, the relationship between the deposit form. Compared with the damages, liquidated damages is an important feature of the payment of liquidated damages applied in a manner to avoid damages in the calculation of the loss is often encountered in the scope and difficulty of proof, saving the cost of computation, or even to avoid the proceedings occurred. Liquidated damages in the application with the way are closely linked, and the link between the two often affected by the impact of the nature of liquidated damages. And the actual performance of the relationship, the right to demand payment of the actual performance with the request to choose between liquidated damages. However, in the case of delay in performance to pay liquidated damages does not of course immune from the actual obligations. Relationship with the deposit, as are directed at non-compliance, so the breach of contract and breach of gold deposits have many similarities, but the gold into the agreement to lift the deposit agreement permits the relationship between gold and liquidated damages are different.The fourth part is the penalty of judicial intervention. First of all pairs of liquidated damages discussed the need for judicial intervention. The agreed liquidated damages as a private act should implement the principle of autonomy of private law, but if the private sector are not well protected their own interests, so that exercise of the right to achieve and protection hampered by the interference when the public authority's intervention is inevitable, and it is necessary. Finally the article discusses the amount of liquidated damages intervention.