Study On The Profit And Loss Balance Rule

Profit and loss balance is a requirement of Damage compensation system. if the victimhave interest for the same cause of the damage, the interest should be deducted in order toavoid the victim for compensation and benefit. However, there is another question that howcan we distribute the benefit from the damage between both parties so that the result is fair?So in this paper, the core content is discuss the applicable standards about Profit and lossbalance rules.The first part, the definition of the profit and loss balance with other countrieslegislation and precedent doctrine. As for the legislation, few countries have the statementabout the profit and loss balance in their legal provision. But the rule have been admitted inmost countries in the world in their juridical practice. However, there is still no reasonablestandards in practice and no In-depth theoretical study about this important rule.The second part, the base about the rules of the profit and loss balance theory. Authoritytheory has two kinds of views, one is the " Differenztheorie", another is the "no profit". Butsomeone thinks that the “no profit” cannot provide a reasonable explanation on thecircumstance that the rule is restricted. So the “teleological explanation” is born and claims toconsider the prevention purposes of damages. This paper argues that there is no necessaryabout the interpretation of the " teleological explanation " and the "no profit" can providesufficient theoretical support for the profit and loss balance rules.The third part, the applicable standards about the rule. We should distinguish betweenthe traditional profit and loss balance and the expansion of profit and loss balance problem.As for the traditional sense of the profit and loss balance, which means the victim receivedinterests in addition to damage, homologous principle is preferred to be considered at first. Asfor the adjustment of expansion of the profit and loss balance, we should consider whethercan victims be granted the rights to claim damages, insurance and social security benefits atthe same time. Then according to the degree of fault, legal policy, interests, honesty and creditand the purpose of payment factors to evaluate for the second time.The fourth part, the applicable method about the profit and loss balance rule. In theapplication of the rule, we should distinguish the different reason which causes the damageand the different way to compensate. Using the rule, it should be quoted by the victim. And we should pay attention to the conflict between the profit and loss balance rule and the rule ofnegligence offset.