Research On The Judicial Discretion Reduction Rule Of Liquidated Damages

In a sense,the history of liquidated damages is also the history of liquidated damages being restricted.With the growing economic development,the clause of liquidated damages in contracts in commercial activities is widely applied,in order to limit the amount of liquidated damages,so that the parties to the transaction have a relatively equal transaction status,the judicial discretionary attribution of liquidated damages came into being.The emergence of this rule is an interference with the freedom of contract between the subjects of the transaction,giving the judge a certain discretionary power.The application of this rule in specific cases should be given comprehensive consideration.The cases are always complex,and the true intentions of the parties may not be discernible only from the text of the liquidated damages signed by the parties.This requires the judge to apply this rule to a correct understanding of the content of the contract and the true intentions of the parties.First of all,the specific circumstances of liquidated damages should be distinguished,which liquidated damages clauses can apply the discretionary rules and which clauses cannot apply the liquidated damages discretionary rules.Second,what are the important factors that should be taken into account in the application of this rule.The application of judicial discretionary rules in China generally takes into account the losses of creditors,the performance of the debtor’s contract and the degree of fault of both parties.Among them,the loss is divided into actual loss and loss of the creditor’s available benefits,and the complete nonperformance and partial performance of the contract should be the situation analyzed in a case-by-case basis.Finally,with regard to the allocation of the burden of commencement and proof of judicial discretion,whether the judge has the right to directly invoke the judicial discretionary rule and the extent to which the creditor andthe debtor should bear the burden of proof.There are no uniform provisions on this in China’s current legal system,and the phenomenon of different judgments in the trial of such cases by the people’s courts has occurred.Through the collation of China’s current legal provisions,the specific practice in judicial adjudication,and the relevant theories of the academic circles,the factors that should be considered in the application of the judicial discretion of liquidated damages are summarized,and the nature of liquidated damages and the burden of proof are explained,so as to provide certain help for solving the problem of liquidated damages in practice.