Study On The Liquidated Damages Reduction Rule

The establishment of liquidated damages belongs to the scope of party autonomy,but if the parties are completely allowed to agree freely,it may lead to obvious unfairness.Therefore,in order to balance the principle of autonomy and fairness,the discretionary rule of liquidated damages came into being.The operation effect of law needs to pass the judicial test.However,the discretionary rule of liquidated damages is limited to its abstractness,which causes many judicial disputes.In view of this,this article starts from the typical judicial cases,focuses on the focus of controversy,refines the gist of the judgment,reflects on the defects of the rules,and explores the ways to improve,so as to be beneficial to the judicial practice.This paper is divided into four parts.In the first part,through the analysis of judicial cases,it is found that there are still many disputes in the application of the penalty and interest,the adjustment of the punitive penalty,the adjustment of the legal penalty and the discretionary standard of the penalty in the loan contract.Firstly,the disputes between liquidated damages and interest in the loan contract are mainly reflected in two aspects.On the one hand,the multiple interest rules in the private lending relationship add applicable doubts to the discretionary reduction of liquidated damages,and the local courts deal with the parts involving interest and liquidated damages differently in the private lending relationship;on the other hand,the excessive interest calculation of credit card overdraft in the financial lending relationship results in a large number of lawsuits In the case of a lawsuit for discretionary reduction of liquidated damages,the local courts have different opinions on the adjustment of the liquidated damages.Secondly,for punitive liquidated damages and "statutory liquidated damages",whether and how to adjust them are hot topics in judicial practice in recent years.Third,although there are provisions in Article 29 of the interpretation of the contract law(2),there are many problems in judicial practice,such as large reduction of liquidated damages,large difference in the proportion of discretionary reduction of liquidated damages in similar cases,transposeof the primary and secondary rules of discretionary reduction,etc.so it is necessary to refinement the rule of discretionary reduction of liquidated damages.The second part mainly combs the relationship between liquidated damages and interest rules in loan contracts.First,the liquidated damages agreed in the private lending relationship should be limited by the legal interest limit.In the calculation of the actual loss,we should establish a more reasonable calculation standard,which can refer to the calculation method of overdue interest in the provisions on private lending.Second,for the credit card overdraft interest rules that are easy to cause disputes in financial loan contracts,the current expedient is to limit the total amount by using36% as the reference ceiling through the discretionary reduction clause of liquidated damages,but the people’s Bank of China should establish a reasonable long-term mechanism to curb the outbreak of such disputes.The third part is about the determination and analysis of the adjustment dispute of special liquidated damages.First,the determination of punitive liquidated damages should be based on the autonomy of the party’s will,supplemented by the loss comparison theory and the liability parallel theory.If the party’s will cannot be confirmed,it is presumed to be compensatory liquidated damages.On the other hand,because the setting purpose of punitive liquidated damages is different from compensatory liquidated damages,the former focuses on the function of performance security,while the latter mainly focuses on damages,so there should be some differences between punitive liquidated damages and compensatory liquidated damages in the way of adjustment.Second,the "birth" of legal liquidated damages relies on administrative normative documents,and its conclusion represents the public interest.Therefore,the standard and period of legal liquidated damages can not be adjusted.However,in order to prevent obvious unfairness,an appropriate upper limit can be set for legal liquidated damages,such as the amount of the contract object.The fourth part re combs the factors that affect the discretionary reduction of liquidated damages,and optimizes them according to the types of contracts.Firstly,according to Article 29 of the interpretation of Contract Law(2),it systematicallyanalyzes the factors involved in the discretionary reduction of liquidated damages,and clarifies the status and role of each factor.Secondly,according to the type of contract,we should refine the consideration factors of liquidated damages,and pay more attention to some consideration factors according to the type of contract and the situation of the case,so as to better achieve the fairness of the case.