Is the standard of 30% compensation for breach of contract reasonable?

I Breach of contract Compensation standard Is 30% reasonable

30% of the contract breach compensation standard is reasonable, Liquidated damages If it exceeds 30% of the loss caused, it can generally be deemed as too high and can be adjusted.

That is to say, under normal circumstances, the maximum agreed liquidated damages should not exceed 30% of the loss.

However, it should be noted that the calculation base of this 30% is "loss" rather than "the amount of the subject matter of the contract", which will be confused by many people in practice.

It is precisely because when the contract was signed, there was no way to know how much the loss would be, so many people agreed on a 30% penalty with reference to the amount of the subject matter of the contract, which gradually became the practice.

Liquidated damages can be agreed or not.

Even if the contract does not stipulate liquidated damages, if one party breaches the contract and causes losses to the other party, the breaching party shall also compensate for the losses caused.

In addition to the legal liability for compensation, there is another liability for liquidated damages.

The liquidated damages are independent of the statutory damages.

In other words, if the contract stipulates liquidated damages, the party at fault should bear both the legal liability for compensation and the liability for liquidated damages.

The provision that the liquidated damages do not exceed 30% of the loss is based on the principle of fairness, which is a restriction on "excessive liquidated damages" when "liability for compensation" and "liquidated damages compensation" overlap.

In other words, if there is a penalty clause, the maximum loss compensation that the breached party can obtain is 100% (legal compensation liability) and 30% (limit of liability for breach of contract compensation) of the loss.

II Contract liquidated damages What is the upper limit

There is no specific limit for liquidated damages, which generally does not exceed 30% of the subject amount.

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, or they may agree on the calculation method of the amount of compensation for losses arising from the breach.

If the agreed liquidated damages are lower than the losses caused, the parties may request the people's court or arbitration institution to increase them;

If the agreed liquidated damages are too high for the losses caused, the parties may request the people's court or arbitration institution to reduce them appropriately.

Therefore, the penalty is punitive, and it does not presuppose that the non defaulting party suffers losses.

Generally speaking, the upper limit of contract liquidated damages is not more than 30% of the actual loss.

But if it is too high or too low, you can request the court to reduce or increase it.

There is no specific limit for liquidated damages, which generally cannot exceed 30% of the actual loss. If the agreed liquidated damages are too high, the court can be requested to reduce them appropriately.

The liquidated damages are punitive in nature, and the premise is that the observant party suffers property losses.

The penalty is determined by both parties through negotiation when signing the contract, and should be written in the Loan contract Only in the middle can it have legal effect.

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