The Research On The Problems Arising From The Adjustment Of Liquidated Damages

Liquidated damages for breach liability system is one of the main ways in various countries is widely used, but there are many disputes on the system both in theory and practice. Adjusting the amount 0f liquidated damages is more prominent. "The People's Republic of China Contract Law" (hereinafter referred to as contract law) in respect of liquidated damages is the compensation of breach of contract. If contractual parties have applied the adjustment of liquidated damages when the penalty "excessively more than" or "lower than" the damage caused by the breach by the parties, the court or arbitration body can do. The principle of Contract freedom and contract justice,good faith,equity and balance the interests of all parties is the legal basis to adjust liquidated damages, also should be followed as adjust payment for the breach of contract. The adjustment of liquidated damages should be based on actual losses and the possible benefits of loss-based, the fault of the parties, contract compliance, the defaulting party payment capabilities, and ease of a contract subject matter of the degree of substitution as referent elements. According to "Supreme People's Court on the application of" The People's Republic of China Contract Law " Judicial Interpretation II " (hereinafter referred to as "Contract Law of Judicial Interpretation II") the liquidated damages that the parties promise exceeding 30 percent of the loss of the breach contract generally identified as contract law under the second paragraph of Article 114th "excessively higher than the loss." The parties after the application to increase the amount of liquidated damages shall not claim compensation for damage. The deadline of applying for adjustment of liquidated damages should use statute of limitation , but not Aus. Applying for adjustment of liquidated damages ,the burden of proof should be based on civil law, "who advocates, who quotes" principle to allocated the burden of proof, especially when the defaulting party to apply to reduce the amount of liquidated damages, can not shifted the burden of proof to the non-defaulting party from the defaulting party because it is easier to prove the losses by the non-defaulting. But the observant can prove breach of contract payment is not higher than the losses caused by the breach to defend.