Determination Of The Validity Of An Agreement To Waive In Advance The Right To Apply For Adjustment Of Liquidated Damages

Fine for breach of contract is one of the main ways for the subject of breach of contract to bear the liability for breach of contract,and subjects involved in often have disputes on the amount of it.Article 585 of the Civil Code also stipulates the rules for discretionary reduction of the fine for breach of contract,giving the litigants the right to apply for the adjustment of fine for breach of contract.However,in judicial practice,the litigants will exclude the right through prior agreement.Whether this agreement is valid is difficult to judge from Article 585 of the Civil Code,and academic and theoretical circles and judicial practice circles have not formed a common understanding on this.First of all,we should be clear that in China,the fine for breach of contract includes Punitive liquidated damages and Compensatory liquidated damages.Therefore,when determining the validity of the adjustment agreement giving up the fine for breach of contract in advance,the function of different fine for breach of contract should be fully considered,so the conclusion drawn is different.Secondly,it was found after sorting and comparing relevant judicial cases that at present,the validity of the agreement of forfeiting the fine for breach of contract shall be determined by the nature of fine for breach of contract and the attribute of the right to adjust it.in the current judicial judgment,the effectiveness of the waiver of fine for breach of contract adjustment in advance is a judicial ruling according to the nature of fine for breach of contract and the right attribute of the right to adjust fine for breach of contract.Finally,the determination shall be made combined with the fact that whether the difference between the attribute of the right to adjust the fine for breach of contract and the nature of it agreed in the contract will affect the agreed validity on the adjustment to the fine for breach of contract in advance.The nature of fine for breach of contract and the attribute of the right to adjust the fine for breach of contract are not clear is the fundamental cause resulting in the above problems,so the choice of the litigants should be respected.If it is compensatory,the agreement that waives the right to adjust the fine for breach of contract shall be deemed as invalid based on the adjustment of "filling principle" in civil legal relations and the public law attribute in forming appeal.If it is punitive,the agreement that waives the right to adjust the fine for breach of contract shall be deemed as valid with the respect to the agreement of both parties based on punishment function,guarantee function and private law attribute in forming appeal.The method can not only ensure that the litigants’ legitimate rights and interests are not infringed to the greatest extent when concluding the contract,but also ensure the accuracy and reliability of the articles cited in the ruling process of the court,and also safeguard the authority and credibility of the judicial system.