What Is Reasonable Compensation?

Compensation for damages refers to a form of liability for the breaching party to make up for the loss of property or benefits caused by the breached party's breach of contract by paying money. Compensation for damages is an important way of liability for breach of contract, with obvious relief function. If one of the parties fails to perform the contractual obligations or the performance of the contractual obligations does not comply with the agreement, the other party shall have other losses after performing the obligations or taking remedial measures, and shall compensate for the losses. It applies not only to the liability for breach of contract, but also to losses caused by torts and other civil violations; it applies not only to breaches of a valid contract, but also to damages caused by invalid contracts. The compensation losses studied in this article only refer to the compensation losses for breach of contract. ^[1]

compensation

1. Compensation for breach of contract is a form of liability for the breach of contract by the breaching party. Breach of contract

When the contracting party's breach of contract causes damage to the other party, the damage caused by the other party should be compensated according to law.

Contracted compensation and statutory compensation

Agreed compensation. The stipulated compensation is also called the compensation schedule. It is

Penalty is one of the additional penalties in the criminal law. It is a form of penalties. It is a property punishment. It is applicable to criminals and legal persons who violate the criminal law. The fines can only be decided by the people's court in accordance with the provisions of the Criminal Law. Except for this, no other unit or individual has the right to exercise fines.

Fines are one of the means of administrative punishment. They are administrative penalties given by administrative law enforcement units to individuals and units that violate administrative regulations. He does not need to be judged by a people's court, as long as the administrative law enforcement unit makes a penalty decision in accordance with the provisions of administrative regulations, it can be implemented. violation

Both monetary compensation and discount compensation involve the calculation of the amount of damages. The key to the calculation of damages is to determine

At about 4 am on January 19, 2007, Ouyang Jie, a female professor at the School of Management of Sun Yat-sen University, jumped off the building and died. Ouyang Jie signed a translation cooperation agreement with Wang Dongfeng, deputy dean of the School of Translation of Sun Yat-sen University and director of the Translation Research Center. Wang Dongfeng's translation research center translated 3 management books for Ou Yangjie. Ouyang Jie's parents believed that her daughter's death was indirectly related to her daughter's contract dispute with Wang Dongfeng. On this translation contract, Ouyang Jie's father Ouyang Zhou sued the Tianhe court for breach of contract by Wang Dongfeng, asking Wang Dongfeng to pay 260,000 yuan in breach of contract. The case opened in Tianhe Court yesterday. Wang Dongfeng said: He strictly executed the translation contract, and Ouyang Jie's death had nothing to do with him.

On March 8, 2006, Ouyang Jie, a professor at the School of Management of Sun Yat-Sen University, signed a tripartite translation cooperation agreement with Wang Dongfeng, deputy dean of the School of Translation at Sun Yat-Sen University, and Sun Yat-Sen University's School of Management. Decision Management-Theory, Methodology, Techniques and Applications "," Must Read Before the International Management Challenge "," Market Forecasting and Decision Analysis Methods "), 3 books totaling 1.26 million words. The content of the agreement is very simple, and there is no specific agreement on the quality of translation. It was only agreed that Ouyang Jie needed to pay Wang Dongfeng 3 fees, totaling 300,000 yuan.

Ouyang Zhou suggested that although the contract did not specifically stipulate the level of translation of the three books, Wang Dongfeng organized a group of student translations, which resulted in unqualified translated manuscripts and was returned by Pearson.

Ouyang Zhou believes that when the contract does not specifically stipulate the quality of translation, reference should be made to industry standards. Wang Dongfeng's translation research center is only a research institution, not a for-profit institution. He has no qualifications to translate management books. "If Ouyang Jie made a mistake on this issue, then Wang Dongfeng made a bigger mistake as a professional." Without qualification, Wang also organized students who were not qualified to translate the book, which directly led to the translation. The quality was unqualified and the manuscript was returned. Since then, Ouyang Jie has cried in front of her family when she returned to her hometown to borrow money, in order to meet the publishing standards of the manuscript, and to fund others to translate the manuscript.

Wang Dongfeng's lawyer suggested that there is no problem with the quality of the translation, but that Ouyang Jie has always been troubled by financial problems. When the translation has been completed, Ouyang Jie has not been able to pay in full. So far, 40,000 yuan has not been paid. The breach of contract is also Ouyang Jie's breach of contract. Ouyang Jie also knows that Wang Dongfeng himself did not translate, and a group of students are translating manuscripts. The agreement did not state that it would be translated by Wang Dongfeng himself.

Ouyang Zhou and Tao Qi, who were over 70, attended a three-hour trial. Tao Qi told reporters that this lawsuit is not for money, but to be fair. The court recommended that the two parties mediate. Wang Dongfeng's lawyer stated that if he wanted to compensate, he was willing to compensate 15,000 yuan. In response, Ouyang Zhou said that if the amount of compensation was too low, he would not accept it. ^[5]

Difference between damages and other liabilities for breach of contract

Damages and actual performance

Article 112 of the Contract Law stipulates that: "If one party fails to perform its contractual obligations or does not comply with the contractual obligations, the other party has other losses after performing its obligations or taking remedial measures, and shall compensate for the losses." It can be seen that these two relief methods cannot be replaced. Actual performance has special functions. First, actual performance is the remedy that must be taken to achieve the purpose of the contract and maintain contract discipline. Second, the application of actual performance can enable the contract to continue to exist, which in turn encourages transactions to increase social wealth. Third, from the burden of proof, the victim does not need to bear the burden of proof for actual losses when he asks for the actual performance of the remedy. Therefore, in the case where many losses are difficult to determine and prove, actual performance is more conducive to protecting the interests of victims . Of course, although the breaching party may not replace the actual performance of the contract with other remedies, for the victim, as long as the damages can effectively protect their interests, they can completely give up the remedies for actual performance and take damages. In fact, in some cases, the method of actual performance is not enough to make up for the losses of creditors. For example, the delayed delivery of the debtor caused the creditor to suspend production and operation, thereby incurring significant economic losses. Although the contracted goods were obtained through actual performance, the losses suffered have not been fully compensated. In response to this situation, it is necessary to combine damage compensation methods to protect the interests of the injured party, sanction the parties in breach of contract, and maintain transaction order and security.

Damages and payment of liquidated damages

Damages and payment of liquidated damages are the main methods of contract liability. The former is mainly a form of compensatory responsibility, while the latter has dual attributes of compensatory and punitive. Therefore, damages are usually combined with actual damages, and there is no necessary link between the amount of liquidated damages and actual damages. Even in the absence of damage, liquidated damages should be paid. If the payment of a liquidated damages is not enough to compensate the victim, the debtor must also bear the liability for damages to make up for the shortfall of the liquidated damages, that is, the liquidated damages can be used in conjunction with the compensation for the losses. However, in the case of a combination of the two, the actual loss of the injured party shall be taken as the maximum limit of liability, that is, the injured party shall not obtain compensation that exceeds the actual loss.

Damages and Remedial Measures

In the case of unsuitability for continued performance, the injured party may require the breaching party to take certain remedial measures to recover the loss. For example, in the contract of sale, if the defect of the subject matter can be repaired, the creditor has the right to require the debtor to repair the defect, and he shall bear the costs necessary for the repair. However, if the creditor still suffers losses after the repair, the creditor has the right to demand damages from the debtor. For example, if the debtor repairs the defect and causes delayed performance, and the delayed performance causes the creditor to suffer losses, then the creditor certainly has the right to claim damages.

Damages and termination of contract

Article 97 of the Chinese Contract Law stipulates that: "After the contract is terminated, the unfulfilled performance is terminated; if it has been performed, the parties may request the restoration of the original status, take other remedial measures, and have the right to claim compensation. It can be seen from this article that after the termination of the contract, the method of compensation for damages can only be used when the restoration of the original state and the adoption of remedial measures are still insufficient to restore the original relationship. In addition, the scope of compensation is based on performance and the nature of the contract. It also includes the costs incurred in managing and maintaining the subject matter, and the necessary expenses incurred for returning the property itself. In principle, compensation for damages upon termination of a contract should not include the loss of available benefits (that is, expected benefits). Because the expected benefits can only be generated if the contract is fully performed. Since the parties chose to terminate the contract, it indicated that they did not intend to continue to perform the contract, and therefore did not consider compensation for their expected benefits.

Damages and Deposit Liability

In order to ensure the performance of the contract, according to the legal provisions or the agreement of the two parties, the deposit is paid in advance by the party to the other party's money or other alternatives at a certain percentage of the subject amount of the contract at the conclusion of the contract or after the conclusion of the contract and before the performance of the contract. Thing. The deposit is guaranty in nature, and it has three functions: guaranty, contract and advance payment. Damage for breach of contract is a form of liability for breach of contract, and both parties are independent. As an independent form of liability, the application of deposit liability is not premised on actual damage, but also applies to the "deposit penalty". Compensation for damages is based on the premise of damages and limited to the compensation for actual losses. Liability for deposit cannot replace damages. In other words, neither the liability for the deposit can be used as the maximum limit for damages nor the deposit can be included in the calculation of damages. Of course, if the deposit and damages are applied at the same time, and the total value exceeds the sum of the underlying price, the court should reduce the amount of the deposit, as appropriate.