Research About Liquidated Damages Adjustment System

As one of the main remedies of civil contract,the liquidated damages system is widely used in the process of contracting.The penalty system possesses the advantages of freeing from both parts' burden of proofs and successfully promoting performance of the contract.Thanks to it' s prior agreement,the amount of liquidated damages may differ from the actual loss that victims have been suffered.As a result,we need to adjust the amount of liquidated damages.However,contract law and the judicial interpretation did not make detailed provisions on how to adjust.Whether in the judicial practice or the theory,the opinion between judges and scholars is not consistent.And now,we require a set of certain rules to solve problems,such as in determining the nature of liquidated damages,in the nature of the penalty of the penalty adjustment on the judicial interpretation of Contract Law two<twenty-ninth> the impact of the size of listed influence factors,some other problems,such as the adjustment of the penalty procedure,the allocation of the burden of proof and soon.This paper is to combine some cases that happened in the judicial practice,the existing provisions of the law and the view of scholars and then gradually analyze these problems and give a reasonable answer.This paper is divided into four parts.The first part illustrates the theme of the article directly with a typical case,from which we can know the problem of adjustment of liquidated damages in judicial practice.The second part analyzes the nature of penalty for breaching the amount adjustment.The nature of liquidated damages influences whether we should adjust the amount.The compensatory liquidated damages and the punitive liquidated damages has their different adjustment rules.During the compensatory liquidated damages,when the liquidated damages amount lower than loss caused by injured party,we can request the increase in the penalty,when the agreed amount higher than loss,the excess part is invalid.But the punitive damages is always decreased.Concerning how to improve it,mainly described in the third section.The third part mainly discusses how to reduce the punitive damages.At first,we discuss the standards about whether the penalty is excessive,and point out that it should be based on the losses caused by breach of contract.Next,we discuss how the factors listed in Contract Low judicial interpretation 2,article 29 influence the adjustment of liquidated damages.Meanwhile,we also analyze some other factors,such as the strength of the parties contracting status and the total amount of the contract.The fourth part analyzes some procedural problems in the adjustment of liquidated damages.