Liquidated damages are too high"

I. Relevant provisions of the Civil Code

Article 179  The main ways to bear civil liability are:
(1) Stop the infringement;
(2) Remove the obstruction;
(3) Eliminate the danger;
(4)) to return the property;
(5) to restore the original state;
(6) to repair, redo, replace;
(7) to continue to perform;
(8) to compensate for losses;
(9)Pay liquidated damages;
(10) Eliminate the influence and restore reputation;
(11) Make an apology.

Where the law provides for punitive damages, such provisions shall be followed.

The methods of bearing civil liability stipulated in this article may be applied individually or in combination.

Key points: According to the provisions of Article 179, paragraphs 1 and 3 of the Civil Code, the payment of liquidated damages and compensation for losses are both ways to bear civil liability; the payment of liquidated damages and compensation for losses can be applied individually orConsolidation applies.
Article 584: If one party fails to perform its contractual obligations or does not perform contractual obligations in accordance with the agreement, resulting in losses to the other party, the amount of compensation for losses shall be equivalent to the losses caused by the breach of contract, including the benefits that can be obtained after the performance of the contract;However, it shall not exceed the losses that the breaching party foresees or should have foreseen when the contract is concluded.

Key points: The amount of compensation for losses shall be equivalent to the losses caused by the breach of contract, which includes the benefits that can be obtained after the performance of the contract, but shall not exceed the foreseeable losses when the breaching party signed the contract.(hereafter referred to as "loss coverage")

Article 585 The parties may agree that when one party breaches the contract, it shall pay a certain amount of liquidated damages to the other party according to the circumstances of the breach, and may also agree on the calculation method for the amount of compensation for losses arising from the breach.

If the agreed liquidated damages are lower than the losses caused, the people's court or the arbitration institution may increase the amount at the request of the parties; if the agreed liquidated damages are excessively higher than the losses caused, the people's court or the arbitration institution may make an increase at the request of the partiesappropriate reduction.

If the parties agree on liquidated damages for delay in performance, the breaching party shall perform the debt after paying the liquidated damages.

1. When it is determined whether the liquidated damages are too high in a commercial housing sales contract dispute, this article can be directly cited; when the liquidated damages exceed 30% of the losses caused, it can be determined as "excessive liquidated damages" and should be appropriately reduced.

2. This stipulation should only apply to disputes over commercial housing sales contracts. For other types of two-way contracts, this stipulation should not be directly cited as the basis for determination.

3. According to Article 29, paragraph 2, of the original Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Contract Law of the People's Republic of China (2), if the parties claim that the agreed liquidated damages are too high and request an appropriate reduction,The people's court shall take the actual loss as the basis, take into account the performance of the contract, the degree of fault of the parties and the expected interests and other comprehensive factors, and make a judgment based on the principle of fairness and good faith.If the liquidated damages agreed upon by the parties exceed 30% of the losses caused, it can generally be deemed as "excessively higher than the losses caused" as stipulated in the second paragraph of Article 114 of the Contract Law. Since this judicial interpretation has been repealed, inIn trial practice, this provision should no longer be used as a direct basis for determining whether the liquidated damages are too high.