Study On System Of Liquidated Damages And Its Adjustment Table Of Contents

Contractual penalty system is a basic system of contract law.It is one of the main ways to bear the liability for breach of contract,and it is applied broadly in Contract Legal Practice.Nowadays,market transactions have became more and more frequent and complex.Under this background,contractual penalty system plays an important role in market-oriented economy as a design to urge the parties to execute the contract,to punish the breaching party and compensate the observant party.But injudicial practice,because the parties have difference in position and the degree of prudence,there are great difference in contractual penalty clause.In order to realize the relative fairness between the parties,our law allows the parties to request the courts or arbitral institutions to adjust the unreasonable contractual penalty.Even so,there are still some puzzling questions in practice,especially about the nature of contractual penalty and its specific application.In practice,the standing provisions about contractual penalty are inflexible and inelastic,going against the judge’s discretion.As to the adjustment system of liquidated damage,the distribution of burden of proof,the condition and scope of the interpretation right of the judge is unclear.On account of the above questions in theory and practice,this thesis analyzes the liquidates damages from the perspective of judicial practice.This paper comprises four parts.The first part is a summary of contractual penalty system,analyzing the meaning,nature and system value of the contractual penalty system.Based on its nature,liquidated damages can be divided into compensatory liquidated damages and punitive liquidated damages.This paper elaborates the values of different kinds of damages.In addition,the following sections mainly investigates the contractual penalty system in other countries,so that to seek inspiration for the improvement of the contractual penalty system in our country.The second part mainly analyzes the current contractual penalty in our country.Firstly,the paper states the current legal basis of our contractual penalty system,analyzes the relative legal articles about the nature,adjustment system and the application of contractual penalty,emphasizing on the insufficiency in trial practice of our contractual penalty system.secondly,the adjustment system of contractual penalty system is imperfect.The conditions and terms for its application is unclear,whether the judge have interpretation right is unclear.Furthermore,there exists punitive damage system deficiency.Social practice doesn’ t totally repudiate the punitive damages,but in trying cases,judges will not affirm the punitive damages according to the party’ s contract.The third part makes some suggestions for improving our contractual penalty system.Firstly,based on the analysis of the status quo of our contractual penalty system,this paper makes suggestions on the condition and term for applying penalty system,the distribution of burden of proof,the condition and scope of the interpretation right of the judge.Secondly,based on the applying conditions of punitive damages and the relations of punitive damages and down payment,the paper gives some proposal on the improving the punitive damage systems.The fourth part analyzes the adjustment of contractual penalty injudicial practice.The adjustment of contractual penalty includes increasing and decreasing of penalty.In judicial practice,most parties request courts to decreasing the penalty.The writer enumerates some elements that frequently occur in practice and may influence the adjustment of contractual penalty and make some analysis on the basis of relative cases so that it can be practically valuable.