Perfecting The System Of Liquidated Damages From The Perspective Of Guarantee Performance Function

Through the statistics and analysis of the Supreme People's Court's cases on the deduction of liquidated damages,this paper sets out the five characteristics of the practice,which are presented in the first part of this article.The above characteristics reveal the problem that the theoretical circles have different understanding of the value and function of the liquidated damages system.In practice,many problems relating to the system of liquidation of liquidated damages are still inconsistent.This phenomenon results in the parties' lack of sufficient protection and expectation of the penalty clause,which affects the security and predictability of the transaction.This paper intends to use the classification of liquidated damages as an entry point to separately analyze different types of liquidated damages,so as to determine the scope of application of the liquidated damages reduction system and discretionary rules:In addition to the introduction and conclusion,the paper is divided into six parts:Part 1: Judicial practice inspection of the liquidation system for liquidated damages.In this paper,the "Judicial Cases" database of Peking University's "False Cases" database is based on the "excessive liquidated damages" as the key word,and the contractual disputes are used as the case.The judicial organs are selected as the Supreme People's Court,and a total of301 judgment documents are retrieved.Through the analysis and summary of these 301 instruments,five important characteristics of the current practice in China's practice sector are:the liquidated damages are subject to higher probability of judicial discretion;the breach of contract is too high;The burden of breach of contract damage is not the same;the punitive penalty for breach of contract is definitely insufficient;the start-up procedure for discretionary damages is unknown.In the follow-up part,this article will take the above five characteristics as the starting point.It is proposed to design a set of effective system of liquidated damages under the current legal framework,and this system will respond to the above five questions one by one.Part 2:Analysis of the nature and function of the liquidated damages system.The goal of this paper is to increase the system of liquidated damages.Before determining the discretion of liquidated damages,it is necessary to clarify the nature and function of the liquidated damages system in order to prevent the discretionary system from being over corrected.This section first clarifies that the liquidated damages are indeed the form of liability for breach ofcontract rather than the form of guarantee.However,its pre-determination makes the liquidated damages have the effect of different ways of responsibility for breach of contract,thus deducing the liquidated damages and reducing the burden of proof on creditors.And the promise fulfills two important functions,and the guarantee fulfillment function is emphasized.In order to follow the selection of the guarantee function as a core perspective of the design of the liquidated damages system,the theoretical pavement was made.Part 3: Confirmation of the scope of application of the liquidated damages reduction system.After determining the applicable object of liquidated damages,the system of discretionary damage reduction can be addressed in a targeted manner.This part firstly divides it into two categories:“punitive liquidated damages” and “compensatory liquidated damages” according to the different functional orientation of liquidated damages.Through a series of analyses,it is judged that “compensatory liquidated damages” is called liquidated damages,but actually,it is still in the damage compensation system,and it should be restrained by the relevant system for damage compensation.It is inappropriate to use the system of damage reduction.Secondly,in view of the nature of the controversial "calculation method of damages" in the practical and theoretical circles,this paper analyzes that the "calculation method of damages" and "compensatory liquidated damages" are integrated into one,and they are not harmful to damages.The object of the reduction system.To sum up,this article restricts the scope of application of the liquidated damages reduction system to the“punitive penalties” that play the role of guarantee performance.Part 4: A theoretical analysis of the justification of punitive liquidated damages.In the third part,this article has limited the scope of the discretionary system to punitive liquidated damages.Therefore,from this part,the discussion objective of this paper is limited to punitive liquidated damages.For a long time,in practice,liquidated damages have been given to the compensation for damages,and the penalty clauses in practice have been directly delineated as compensation liquidated damages.For punitive liquidated damages,such payments may exceed the actual damages.The terms are cautious.This kind of cautious attitude has made the punitive liquidated damages always in a state of marginalization,and its function and value are not completely exerted.In this paper,punitive liquidated damages are the only applicable object of the liquidated damages reduction system.It is necessary in order to respond to the misunderstanding that punitive liquidated damages have suffered for a longtime.I hope that through the analysis and interpretation of punitive liquidated damages,this can make reappearing with a new attitude.Part 5:There should be restrictions on the punitive damages reduction system.The fourth part of this article expounds the legitimacy of liquidated damages,but it is undeniable that there are a lot negative externalities associated with the positive value of punitive liquidated damages.This requires judicial justice founded on the principle of fairness.Less;but in order to prevent overcorrection,the discretionary reduction system also needs to accept the restriction of the guarantee performance purpose contained in the retributive liquidated damages.From affirmative liquidated damages to limiting liquidated damages to limiting the court's discretionary reduction of liquidated damages,the whole process has always been centered on the game of the principle of autonomy of will and the principle of fairness,reflecting the natural development of the twists and turns of the liquidated damages system and the spiraling perfection.This affirmative-restricted-restrictive thinking is also the theoretical guidelines for constructing a system of liquidated damages.Part 6: The specific system design for punitive damages.Under the guidance of the above-mentioned affirmation-restriction-re-limitation,the system of liquidation damage reduction in this paper is based on three levels of discretionary reduction,discretionary gradient and discretionary reduction.First,the amount of liquidated damages should be equivalent to the benefits it guarantees.Exceeding part spills over the scope of the purpose of guaranteeing performance and should not be supported;thereafter,on the basis of determining the reasonable amount of liquidated damages,it is based on different default faults.Degrees are subject to gradient discretion,thereby exerting the guaranty and incentive effect of punitive liquidated damages on the performance of the contract;finally,through procedural design,the freedom of discretionary reduction of the parties ' breach of contract is fully respected and procedurally restricted.Finally,a new approach has been devised from the legal effect in cases where the liquidated damages are too high and the non-compliance procedure is not respected.