On The Limit Of Discretionary Judicial Reduction Of The Liquidated Damage In China

The Liquidated damage is being widely used in various contract texts,is the result of the strength of its inherent functional attributes of damages to the default and guarantee performance.However,because of chaos of the rules about discretionary judicial reduction of the liquidated damages,improper guiding ideology of discretionary judicial reduction of the liquidated damages,coupled with the excessive application of the power of interpretation by the judges,leading to the result that the discretionary reduction of the liquidated damage is in large probability.What's more,it is inconsistent with contract freedom and contract justice.In addition,the judgment of the liquidated damages in discretionary judicial reduction of the liquidated damages,which is contract interpretation substantially,should follow the autonomy of the parties.It is distinguished between the punitive damages and compensation of liquidated damages about discretionary reduction of the liquidated damages.Among them,compensation of liquidated damages should reduce appropriately from the prospective of damages to the default;otherwise the punitive damages should be at the limit of obvious inequity from the prospective of urging the debtor to perform.Furthermore,it should be clear in guiding ideology that the principle of the discretionary judicial reduction of the liquidated damages is none-discretionary,discretionary reduction is exception,and judges should be prudent application of the judge's interpretation power.