Contract Breach Damages Calculation Standard

Author: Yan Jian
Publisher:
Publish Date: 2005-08-01
Features: China has long been renowned as a land of etiquette, but in real life, we often encounter such troublesome issues: Property advertisements promise so much, yet the newly purchased (new residential property) fails to match the ads—no mountains or waters, no fitness facilities—it’s all deception! Who is responsible for the loss? A valuable document bag is lost, and the owner is frantic. They place a reward ad in the newspaper, and someone retrieves the bag for a reward. If the owner refuses to pay, they might even say, "Returning lost property is a traditional virtue of the Chinese nation. Now we are promoting 'Learning from Lei Feng.' How can 'Lei Feng' be like you, asking for money?" What if the reward money cannot be fulfilled? "A father’s debt is the son’s debt, and a son’s debt is the father’s debt." In ancient China, debts were not separated by family. But in a modern society with (sound legal system), if a daughter borrows money using her father’s name, who is responsible for repaying it? Owning a car of one’s own has become the dream of more and more people. Zhang (Ms. Zhang) was overjoyed when she bought a luxurious Lincoln car for only 180,000 yuan at a used car market, but she never expected the used car was actually a car seized by the court. What should she do? After a grand and joyous wedding, all the activities were captured by a photographer, leaving behind lasting memories of happiness and sweetness. The next day, the newlyweds excitedly took the film to the photo studio for development, only to find that the studio had lost such a precious roll of film! Who is responsible? Storing bags in supermarket lockers is almost a common sense for people shopping in supermarkets, but the bags stored in the automatic lockers disappeared! Cash, keys, identification documents, stock certificates, account cards, contact lists, and business cards—all gone! Should the supermarket compensate for the lost items? When encountering these troubles, how can they be resolved? For a long time, our common people seem to be accustomed to an environment governed by personal connections rather than the law, accustomed to seeking help from leaders or connections when facing problems, and unaware of the importance of the law or the meaning of the rule of law. Some people, when their rights are infringed upon or when conflicts arise, even resort to illegal means to vent their anger, seek revenge, or resolve matters privately, which inevitably leads to negative consequences and even tragedies. Others, when facing difficulties, feel helpless and can only swallow their anger, suffer injustices, completely unaware that their personal rights and property rights are protected by law. Law is a set of behavioral norms. From this perspective, the object of law is human behavior, but this is only the surface. If there were only one person on Earth or if people did not interact directly or indirectly with each other, law would lose its meaning. Since people interact, there will inevitably be conflicts and disputes, and law exists precisely to mediate these conflicts. Therefore, the true object of law is the relationships between people, though it only governs a part of these relationships. Law regulates the relationships between people or governs their behavior by granting legal rights and imposing legal obligations on them in interactions. According to common interpretation, rights are "the legal power to enjoy specific benefits," while obligations are "the legal constraints imposed on parties to act or refrain from acting." The "power" of one party and the "constraint" of the other party complement each other and mutually reinforce each other, but their common origin is the specific coercive provisions in the legal system. That is, when a person’s behavior meets certain conditions, they must bear a coercive adverse consequence, which is legal liability. Contracts are the means and forms through which people achieve their transactional purposes. In practice, the realization of transactional goals often relies on parties voluntarily fulfilling their obligations as agreed upon. The conscientiousness of contract parties in this process stems from the law’s imposition of coercive adverse consequences on parties who fail to fulfill their contractual obligations or fulfill them in a way that does not meet the parties’ agreements or special legal provisions. This coercive adverse consequence is breach of contract liability. Of course, the coercive realization of contracts is an abnormal manifestation of contract realization, and we do not pursue such forms. This form directly reflects the ignorance, indifference, or even evasion of citizens toward the law, which is something we do not wish to see. Consciously abiding by the law or the agreements of both parties, conscientiously fulfilling contractual obligations, and exercising contractual rights are the inevitable choices for citizens in a rule-of-law state, and this is the realm we aspire to. Of course, our current society is still far from this realm, but through our efforts, we believe it will eventually be achieved. May the publication of this book contribute a small part to this cause.