Study Of Controversial Issues Of Liquidated Damages

According to the nature of classification, can be divided into compensatory liquidated damages and punitive liquidated damages penalty two. Often used as a remedy for breach of contract, liquidated damages in economic activities play an important role. Since the Roman law has been liquidated by the national legislation system was widely adopted. Liquidated damages has been recognized in China's legislation, and in different economic times give different penalty functions. In the planned economy era, the penalty is reflected in the protection of national economic planning, and therefore use more legal forms, focusing on the breach of the punishment. "Contract Law" enacted, the penalty is reflected in the parties more autonomy to compensatory-based, both punitive. According to "contract law" the provisions of section 114, liquidated damages provisions set free by the parties, breach of contract occurs, the defaulting party shall be a pre-agreement parties to undertake pay liquidated damages to the observant the responsibility to make up for the observant suffered losses. In the penalty is too low or too high, the parties may apply to the court or arbitration body of the amount of liquidated damages to make proper adjustments to ensure that the public authority, when necessary, intervention in liquidated damages, liquidated damages liability to avoid excessive expansion. And damages and other remedies as compared to pre-liquidated damages with certainty, for simple, timely, you can save a lot of litigation resources, benefit performance of the contract. As the "Contract Law" on the liquidated damages provisions are too general, too much time in the application of the judge's discretion to rely, therefore, the Supreme Court to judicial interpretation in the form of liquidated damages applicable principles and standards to do a relatively thorough requirements so that the application of liquidated damages based on further clarified.This paper is divided into four parts:Introductory paper discusses the definition of liquidated damages, legal characteristics, the specific function and evolution of the system of liquidated damages. China's legislation did not make a clear definition of liquidated damages, "Contract Law" Section 114 provides that "the parties may agree that one party should be based on breach of contract breach to the other party to pay a certain amount of liquidated damages, for breach of contract can be agreed upon damages resulting from method of calculating the amount. "According to this provision in conjunction with the views of scholars, can be understood liquidated damages: liquidated damages agreed upon in advance by the parties determined, in default to perform after the effective conduct independent outside payments. Liquidated damages law is characterized by: first, the specific amount of liquidated damages shall be determined prior agreement by the parties; second penalty is agreed upon by the parties, in the event of breach of contract after the other party shall pay the money; third, the payment of liquidated damages in addition independent of the performance behavior; fourth, the payment of liquidated damages is a form of breach of contract form. On penalty functions, generally considered both a breach of contract form, is also a form of debt security. Penalty system originated in Roman law, civil law and common law after being adopted. Civil penalty has recognized two types of compensation and punishment, and the common law only recognizes a compensatory penalty. China's legislation also focus on the liquidated damages provision, the planned economy era, the legislation approved punitive liquidated damages provisions to strengthen the state intervention in the economy, the completion of the protection of national economic planning. "Contract Law" enacted after the creation of a free system of agreed liquidated damages, the contract reflects the value of freedom.The first part, the positioning of punitive liquidated damages, mainly discusses the compensatory and punitive liquidated damages the difference between liquidated damages, associated with the academic point of view and comment on the author's understanding. Current view is generally believed that liquidated damages can be divided into categories according to the nature of compensatory and punitive liquidated damages penalty two, the establishment of the role of compensatory liquidated damages is to compensate one party to another party after default, the losses caused by punitive penalty with no necessary connection between the actual loss, not the actual loss of restriction, the amount of liquidated damages is generally higher, and prompting the parties to fully perform the contract, the parties will not dare to breach of contract. Compensatory and punitive liquidated damages the difference between liquidated damages is: First, compensatory liquidated damages at the time of the need to consider the emergence of non-compliance may result in the loss, punitive liquidated damages in the setting, do not have to consider the possible consequences actual loss; second, the parties in the application of compensatory penalty system, no further request for damages, punitive damages can not replace the liquidated damages, the parties in the application of punitive penalty system, it may still claim damages; third compensatory amount of liquidated damages to be determined based on the actual losses, punitive penalty applies mainly to study the existence of fault, regardless of the specific amount of actual loss. Liquidated damages in recognition of China's legislative system to the main compensatory liquidated damages, punitive penalty is added.The second part, liability for breach of liquidated damages and other forms of relationships, mainly discusses the penalty and damages, the deposit, the actual performance and the differences and similarities between the termination of the contract. Liquidated damages, compared with, eliminating the burden of proof of actual loss and the calculation of the loss confirmed the specific amount of such trouble, so observant rights becomes easy. In China, the most important deposit is the default form of the deposit, the two co-exist, the parties may choose a more favorable one's own to be applied. Liquidated damages even though it can play a compensation, penalties and so on, but not so observant get their expectations based on the full benefit of the contract, therefore, the defaulting party to pay the liquidated damages, the contract has not been lifted, and can continue to perform, observant party may request the actual performance of the contract. After the contract is discharged, for the lifting of the parties before the breach of contract, liquidated damages provisions are still applicable, compliance after termination of the contract the parties can, ask for payment of liquidated damagesThe third part, the adjustment of the amount of liquidated damages, the amount of liquidated damages mainly discusses the adjustment system of inspection, the judicial practice of China's adjustment of the rules of the amount of liquidated damages analysis, adjust the amount of liquidated damages and liquidated damages a prerequisite for the amount of adjustment of the reference element. When the master contract should be legally valid contract and the parties in the performance of the contract when there is breach of contract, breach of contract payment obligations to be established. Under the "Contract Law" Section 114, "Supreme Court to hear cases of commercial contract dispute the interpretation of the law applicable to a number of issues." The judicial interpretation of Article 16 and the "Supreme Court on the application of" Contract Law "a number of issues of interpretation (b)" Article 28, Article 29 provides that the amount of liquidated damages can be explicitly adjusted our specific principles and standards: first, the penalty lower than the actual losses, should refer to the actual loss, the amount of liquidated damages will be adjusted to the actual loss of standards, and compensation. Second, the penalty is too high in the identification and adjustment should be guided by two "30%", that is more than the agreed liquidated damages caused by the loss of 30%, would be deemed excessive amount of liquidated damages, and thus take full account of performance of the contract circumstances, the parties at fault, and other factors on the specific amount to be adjusted; which, in the real estate sale, the penalty is too high found after the direct loss of liquidated damages exceed 30% of the standard, adjust the amount of liquidated damages.