On The Adjustment Of Breach Of Contract

The appropriate adjustment of liquidated damages can be applied for either punitive penalty or compensative penalty arranged by contract. However, there is no explicit provisions for the time to adjust and the degree of adjustment. The standard and the magnitude are less certain in Chinese Contract Law, which leads to larger discretionary space for judges in such cases. No matter court or arbitration institution is difficult to deal with specific cases.In this paper, we agreed that the penalty has the dual nature of punishment and compensation, and we want to solve this problems of the time and the degree of liquidated damages with the analysis according to the basic theory, the application of liquidated damages, adjustment procedure etc. Solving the above problems will improve the system of the liquidated damages adjustment. Perfect system and uniform of standards will make the judicial process and arbitration institutions have rules in the adjustment of the liquidated damages, and because of the differences in the use of standards will be reduced.In order to balance the interests of both parties to contract, the liquidated damages should be increased or reduced by the control of the discretions of the judges. It is the results of national intervention whether it is increased or reduced. The adjustment of penalty will lead to the balance of the parties’ interests; contribute to play the purposeful and the instrumental value, help to promote judicial justice and law of unity Furthermore,to balance the interests of both parties to contract, the nature of breach of contract and the other concrete factors should also be considered through the process of the adjustment of liquidated damages.