Study On The Applicable Relationship Between Contract Rescission And Penalty For Breach

After the breach of contract,in order to get rid of the bondage of the original contract so as to seek the protection of legitimate interests and avoid the expansion of its own losses,on the basis of adhering to the principle of contract justice,the defaulting party has the right to break the shackles of the contract.The purpose of paying the penalty for breach of contract,as a legal consequence of taking the responsibility for breach of contract,is also to protect the lawful rights and interests of the parties and to urge the proper development of the contractual relationship,so as to make up for the actual damage caused by the breach of contract,to realize effective,simple and reasonable relief to the party in compliance with the contract.On the aspect of the applicable relationship,there are many arguments in the academic circles about the system structure,interaction and benefit measurement between the rescission of contract and the penalty for breach of contract,another view is that after the termination of the contract to comply with the liquidated damages clause will lead to double benefits,increase the responsibility for breach of contract,so it can not be applied.By comparing the relevant situations and analyzing the research,we can understand the interaction and influence of the two at the level of law and policy more deeply,and also seek the basis and premise of the coexistence of the two at the level of law and technology more deeply,then we can reasonably determine the specific applicable relationship of complicated dispute cases in judicial practice.In the case of termination of a contract due to breach of contract,the independent breach penalty clause,once agreed upon by the contract subject,has the status of being applicable at the priority level and not affected by the contract,however,in the trial practice,most of the complicated issues of rescission of contracts are due to the inclusion of a clause on penalty for breach of contract,and most of the non-compliant parties make claims for rescission of contracts and payment of penalty for breach of contract simultaneously,in such a difficult situation,the court plays an important role in the determination of the nature of liquidated damages and in the discretion of the amount,and agrees that the coexistence of the two can save judicial resources and improve the efficiency of litigation,more importantly,the calculation of the actual damage can reach the satisfaction of the party keeping the contract,and can make up for its economic loss and benefit.Based on the analysis of the inherent logic of contractrescission,the penalty for breach of contract should be based on the actual damage caused by the breach of contract.The contractual nature of liquidated damages is guaranteed by the principle of freedom of contract,and can realize the priority and order as economic compensation,which is also the embodiment of the idea of contract justice.This paper is divided into three parts.The first part introduces the typical cases selected by the author,clearly points out the current controversial issues in focus and summarizes them.The second part draws out the main arguments of the paper according to the cases,this paper discusses the legal characteristics and legislative purposes of contract rescission system and breach penalty system respectively,compares and studies the relevant systems of breach penalty in foreign countries so as to deeply analyze the basis and conditions for the application of breach penalty after contract rescission,this paper explains the internal logic of the relationship between the two,and then finds out the existing problems in China’s judicial practice.The third part puts forward some perfect suggestions from the angle of legislation,judicial practice and practical transaction,it is expected that the standard of the relationship between them can be clearly identified,the legal risks in specific situations can be reasonably avoided,the legitimate rights and interests of the parties can be protected,and the bad losses caused by the performance of the contract can be reduced.