On The Punitive And Compensatory Penalty

Penalty, is kind of money that is paid to the observant party if one party doesn`t perform or doesn`t thoroughly perform the contract according to the previous appointment by the two parties. The penalty origins from the Roman Law with the obvious punishment. With the development of the Capitalism, the punishment has been abated and trends to be compensable. The development of the nature of the penalty just reflects the change of the contract value. Through the comparison of the rules about the penalty nature between the Continental Legal system and the American Legal system ,this thesis learns about that the Continental Legal system admits that the system of penalty both has the nature of the penalty and the compensate, while the American Legal system only admits the compensate of the penalty, it is obvious that different rules of nature reflects different legal principle, but how to define the bounds between the penalty and the compensate? Is it penalty or compensate that should be admitted? If the penalty is admitted, is it necessary to ask the observant party to pay the compensate for the delay after the contract has been performed and the penalty has been paid? Except from the state of the delay, how about other kind of the violation of the contract? All these questions have been posed and should be solved by this thesis, and it is of great significance to the use of the system of the penalty in the contract.At the beginning of the thesis, the real reason of the penalty nature is posed, then with the beginning of the definition and the principal feature, this thesis studies the principal theory, and makes a clear definition for the penalty. On this basis, through the comparison of the Continental Legal system,the American Legal system,the Taiwan and the scholar from the continent, then analyze the penalty nature of our country and studies the decisive value behind the different rules of penalty, besides it also puts forward some points of view about how to use the penalizing violation of the contract and the compensable violation of the contract and how to deal with the relation between the penalty and other kinds of the obligations.This thesis can be divided into four parts:The first part: the principal of the penalty, which includes the definition and the feature of the violation of the contract, and the significance of the definition of the penalty. The second part: the comparable study of the penalty nature, which includes the two legal systems,the views from the scholars of Taiwan and the continent.The third part: the penalty nature of our country.The fourth part: the use of the penalty ,which includes both the compensable violation of the contract and the penalizing violation of the contract.At the conclusion of the thesis, the writer thinks that to define the penalizing violation of the contract, it is available to undertake the obligation of the penalty after the observant party performed the debt for the damages it caused. Besides, considering the benefit and the stability of the contract, penalty and compensate is both essential natures. When it comes to whether the penalty is punitive or compensable, it relies to the appointment of the two parties, and it is unnecessary to follow the principle of the priority of the compensable penalty and the auxiliary punitive penalty. Last but not the least, the use of the penalty shouldn`t be limited to the case of delay, but can be used in all kinds of action of the violation of the contract.