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Is it a breach of contract if the property fails to perform its contractual obligations?
Legal basis: Article 144 of the Civil Code of People's Republic of China (PRC), the parties may agree that one party shall pay a certain amount of liquidated damages to the other party in case of breach of contract, and may also agree on the calculation method of compensation amount for losses caused by breach of contract. Therefore, liquidated damages are punitive, not based on the premise that the non-breaching party suffers losses. Generally speaking, the upper limit of the contract penalty is not more than 30% of the actual loss. But if it is too high or too low, you can ask the court to reduce or increase it. If the agreed liquidated damages are lower than the losses caused, the parties may request the court to increase the liquidated damages; if the liquidated damages are excessively higher than the losses caused, the parties may request the court to appropriately reduce them. However, liquidated damages are an estimate of the possible losses caused by one party's breach of contract at the time of contracting, which is not completely consistent with the actual losses of the observant party after breach of contract, so it can be left to the judge's discretion.
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