The Judicial Adjustment Of Liquidated Damages

The liquidated damages can urge the debtor to fulfill his obligations according to the contract,and the payment of liquidated damages after debtor's behaviour for breach of contract can compensate the losses suffered by the creditor,so the liquidated damages has outstanding institutional advantages.The law allows the parties to agree in advance on the liability for breach of contract in the form of liquidated damages,showing respect for autonomy of the will.Examining the legislation of the two legal systems on the liquidated damages,we can know that the clause of liquidated damages is placed under judicial review.Our country follows the tradition of civil law system and establishes the judicial adjustment rules of liquidated damages,giving judges the discretion to adjust unreasonable liquidated damages,which is conducive to ensuring substantive fairness and justice.The academic circles have not formed a unified understanding of the specific application of the judicial adjustment rules of liquidated damages,which include the application object,the adjustment criteria,the adjustment range and the litigation procedure.judges have different understandings of the meaning of a series of provisions in the practical field,so this paper mainly studies the legal application of Article 114,paragraph 2 of PRC Contract Law in order to clarify the misunderstanding of the legal provisions and enhance and refine the specific application of judicial adjustment rules.This paper is mainly divided into five chapters:Chapter one explores the normative nature of Article 114,paragraph 2 of PRC Contract Law to analyze whether the agreement that liquidated damages cannot be adjusted has legal effect.The history of establishment of the adjustment regulation of liquidated damages in France and Germany highlights that the legislative purpose of the judicial adjustment rules of liquidated damages is to restrict the overflowing autonomy of the will and pursue fairness and justice.Common law system and civil law system choose different ways to limit liquidated damages,but the underlying values are consistent.The balance between freedom of contract and justice of contract is a universal value.Therefore,we can explore the legislative purpose of the provision and find that the provision has compulsory effect.Through the assumption of reverse legal effect,in order to avoid the frustration of the purpose of the provisions,the jurisdiction of judicial adjustment can not be excluded by the parties by special agreement.Chapter two analyses the applicable objects of the judicial adjustment rules of liquidated damages.The types of liquidated damages applicable to the judicial adjustment rules of liquidated damages include "dual attribute theory" and "single attribute theory".The "dual attribute theory" has little practical significance for the adjustment of liquidated damages.The "single attribute theory" can be divided into three viewpoints: compensatory damages,punitive damages and inherent liquidated damages,which all have flaws in interpretation.Regardless of the nature of liquidated damages should be included in the judicial adjustment system.Using the legislative data and the method of literal interpretation,we can make clear that “the calculation method of compensation for loss” is one of the forms of liquidated damages.In addition,there are non-monetary liquidated damages.In order to avoid inconsistent behavior,the debtor may not apply for adjustment after the liquidated damages are paid,except that the deposit is regarded as liquidated damages.Chapter three explains the specific applicable rules of judicial discretion of liquidated damages.The purpose of exercising the judge's discretion is to realize the public policy and give consideration to the parties' intentions.The way to judge3whether the liquidated damages are too high usually follows the basic idea of comprehensive measurement.The fixed proportion of 30% should be weakened because it does not consider the characteristics of the industry and the types of contracts.The basic object of comparison of liquidated damages is "losses caused by breach of contract ".The agreement of liquidated damages indicates that the debtor's foresight of liquidated damages liability is possible.The normative meaning of "losses caused by breach of contract " should not be limited to foreseeable losses.The comprehensive measurement factors and guidance of legal principles stipulated in the judicial interpretation seem clear and complete.The consideration factors such as the fault of the parties and the performance of the contract should be explaind and refined.The principle of fairness and good faith can recreate rich reference content for the discretion of liquidated damages.In addition,the amount of liquidated damages indicates the Pre-establishment of the function of liquidated damages by the parties.Monetary compensation can play a soothing role in the loss of spiritual interests.Therefore,the gap between liquidated damages and expected damages and spiritual interests can be added into consideration.Chapter four explains the specific application rules of judicial increment of liquidated damages.According to the differences of expressions of legal provisions,we should explores whether the judge's incremental right to liquidated damages should be exercised in moderation.Because the increase of liquidated damages does not need to be determined by a comprehensive measurement of many factors,the difference between liquidated damages and losses caused by breach of contract is an important factor.However,the concept of loss is different from that of judicial discretion rules.In general,the court should increase the liquidated damages to the level of predictable losses.In terms of the relationship between the right of claim for incremental liquidated damages and the right of claim for damages,in order to respect the choice of legislation,the injured party should exercise the right to increase the liquidated damages to seek legal relief when the liquidated damages are lower than the losses except for special agreement.Chapter five mainly discusses the procedure of judicial adjustment of liquidateddamages.There are two main legislative examples of the initiation mode of liquidated damages.The initiation mode applied by the parties meets the requirements of autonomy of the will.The parties may exercise the right of claim for adjustment of liquidated damages by litigation or defense,which belongs to the right of formation of action in nature.Academia and practice have different understandings about the conditions of exercising the judge's interpretation power in judicial adjustment of liquidated damages.The exercise of the judge's interpretation power should be limited to specific circumstances in order to achieve litigation justice and efficiency.In the burden of proof,the burden of proof of both parties to the contract should be reasonably allocated.In order to protect the function of liquidated damages to simplify the burden of proof,we should draw lessons from foreign experience to reduce the standard of proof of loss.The reasonable time for judges to determine the rationality of amount of liquidated damages by considering comprehensive measurement elements is the end of the factual trial debate.