Research On The Adjustment Of The Liquidated Damages

Our country's liquidated damages to adjust the disputes mainly aim at the "People's Republic of China Contract Law" (hereinafter referred to as the "Contract Law") Article 114, according to the second paragraph of the "Contract Law". According to this law, if liquidated damages are higher or lower than the actual damage, the parties could apply to the court or the arbitration institution to make adjustments. However, this provision, including corresponding judicial interpretations, doesn't give a specific adjustment standard, and only the application of the contract law of the People's Republic of China (2) (hereinafter referred to as the "contract law judicial interpretation") from the Supreme People's Court Several Issues determines the compensation adjustment principle and loss exceeded 30 percent standard. Besides, the general idea in China thinks that the main properties of liquidated damages are compensation,and liquidated damages'targets should be adjusted to the compensatory penalty, however, as liquidated damages inherent sense of punitive damages is not prohibited but couldn't be applied in the embarrassing situation and the compensation for the principle of adjustment of liquidated damages for the inherent functions cannot be applied. What's more, the legislation model of combination of civil commercial law makes civil and commercial contracts have the same standard in adjusting liquidate damages, which is not good for protecting commercial subjects'benefit. Moreover, in practice, the parties agreed to give up the right to adjust the request for liquidated damages, then this agreement is also effective? In order to solve the deficiencies of adjusting the liquidate damages standard, firstly, we should ensure the natural and functions of liquidate damages, on one hand, punitive liquidated damages as the traditional liquidate damages make sense on performance guarantee, on the other hand, liquidate damages'adjustment targets must be the punitive liquidated damages. Secondly, it should make sure that the premise of the combination of civil and commercial law to adjust commercial liquidate damages by respecting representation and the duty of care in the commercial law. Thirdly, the right to adjust the request for liquidated damages is a right of relief after the nature of public law, and it can not be ruled out by agreement. Through the defects of our legal system which caused problems discuss deeply and improve the adjustment system in liquidate damages, otherwise, we should protect the parties'legal benefit and achieve the substantial justice in contracts, which could promote the progress of the market economy.