Research On The System Of Breach Of Contract

Although default fine is widely applicable to the contact law systems, the understanding of the concept by public is still superficial, and business disputes happens due to different comprehensions towards the issue. In this paper, comparative analysis and normative analysis are adopted to comprehend and character the default fine system based on our existing law, default fine laws in other countries and default fine policies from ancient East and West are taken as references.In order to obtain a comprehensive understanding of the default fine, the basic theories are studied in the first part of the article from different angles, such as concept, characters, natures, functions, classifications and so on. Default fine has been playing an essential role in promoting the contract execution and settling the contract breaching dispute based on its punitive and compensative functions. However, since the academia and the society share different opinions towards this issue, the controversy of its application has been raised for a long time. It is concluded that the punitive character of default fine policy in China should be reserved.The second part of the article demonstrates the default fine system with more details with the dimension of the vertical to the history and the transverse to the reality. Comparative analysis is applied in order to introduce the concept in depth. The history of default fine policy can be traced back to the Roman law period, and in ancient china, there was law like ’punish if it expired without payment’, which indicates that the punitive character of default fine policy has been adopted both china and foreign countries in old times. Western law system, especially the continental legal system, has been deeply influenced by Roman law, from which many traditions are inherited, including the punitive and compensative characters of the default fine policy. With the rise, establish and acceptance of democratic perceptions, such as liberty, equality, natural rights, popular sovereignty and so on, the characteristic of punitive has been weakened while that of compensative has been strengthened, and the west common law system even derecognize the punitive of default fine policy. Our ancient law eventually could not complete the natural transition to the modern law, so the legal system of the West and the Soviet Union has a tremendous impact on the law of China and so was the default fine policy part.Chapter3discussed whether default fine could exist with other methods of bearing liability when breaking the contract. It is believed that in some conditions, the default fine can coexist and apply with other responsibilities for breach of contract at the same time, not just limited to the third paragraph of Article114of the Law of Contracts that the default fine can coexist with the delay in performance. As one way of taking responsibility for breach of contract, what kind of relationships exactly are among the default fine, deposit, compulsory execution, damage compensation as well as contract termination? Are there any situation can coexist and apply at the same time? Those questions need further discussion.In Chapter4, the constitutions of breach, the penalty responsibility and the adjustment of default fine are studied thoroughly. The application of default fine should be based on the liability constitute, and the determination of responsibility and commitment should be based on the imputation of penalty responsibility as well. After imputation, the controversy of default fine applicability still exists and whether the amount of penalty is reasonable bears the brunt.The fifth chapter of the article aims to propose some suggestions to promote the default fine system and perfect its application in China. By classifying, thinking, theoretical analyzing and comparative studying of the default fine, it is hoped that this study could be helpful to the improvement of the system of default fine and perfection of its application.