Legal provisions of liquidated damages in renovation contract

The legal provisions of liquidated damages in renovation contract need to be specifically analyzed. The following is the analysis: There are corresponding breach clauses in the signed renovation contract. There is no well-known liquidated damages in law. Therefore, the liquidated damages are usually the liquidated damages for the contract signed by the installation owner and the person in charge of decoration. The liquidated damages are agreed by both parties themselves, and there is no direct provision in the law. The Civil Code not only gives the parties the freedom to agree on liquidated damages, but also stipulates that the parties can claim to adjust the amount of liquidated damages.

The liquidated damages in renovation contract shall not exceed 30% of the actual losses, as follows:

1. If the liquidated damages are too high or too low, the parties may request the court or arbitration institution to reduce or increase them appropriately according to the actual losses suffered by the parties;

2. If the liquidated damages prescribed by law are lower than the losses caused, the people's court or arbitration institution may increase them at the request of the parties; If the agreed liquidated damages are excessively higher than the losses caused, the people's court or arbitration institution may appropriately reduce them at the request of the parties. If the parties concerned pay liquidated damages for delayed performance, the breaching party shall also perform the debt after paying the liquidated damages.

Decoration deposit cannot be refunded for the following reasons:

1. The deposit is legally binding. When the payer fails to perform the contract, the deposit cannot be returned. When the party receiving the deposit fails to perform the agreement, it shall return the deposit to the other party in double. There is a difference between "deposit" and "deposit", which is not legally binding. You can stop cooperation at any time and return it to the other party;

2. One party's breach of contract is a legal or agreed situation in which the down payment penalty is applicable. If the other party breaches the contract in other matters, it will only unilaterally apply the down payment penalty to the former, and the latter may be held liable for breach of contract. If both parties breach the contract in a legal or agreed situation, the deposit penalty applies to both parties, that is, one party loses the deposit and the other party returns the deposit twice. After offsetting each other, the party paying the deposit can recover all or part of the deposit.

Application of liquidated damages and compensation;

1. liquidated damages refer to a certain amount of money that one party should pay to the other party according to the contract or the law because of its failure to perform or not fully perform the contract;

Compensation means that one party to a contract violates the contract and causes economic losses to the other party, and should pay a certain amount of compensation.

2. Whether one party's breach of contract causes losses to the other party, as long as both parties agree on the penalty clause in the contract, the breaching party must pay the other party the penalty.

The premise of paying compensation must be that one party breaches the contract and causes actual losses to the other party.

3. In addition, if the liability is assumed in the form of liquidated damages, if the actual losses caused by the breaching party to the other party exceed the liquidated damages, it shall compensate for the insufficient liquidated damages.

4. liquidated damages and damages cannot be claimed at the same time, but if the liquidated damages are too low or too high, you can also ask for an increase or decrease in liquidated damages.

Legal basis:

Article 586 of the Civil Code of People's Republic of China (PRC)

The parties may agree that one party shall pay a deposit to the other party as a guarantee for the creditor's rights. The deposit contract is established when the deposit is actually paid.

The amount of the deposit shall be agreed by the parties; However, it shall not exceed 20% of the subject matter of the main contract, and the excess shall not have the effect of deposit. If the actual amount of deposit paid is more than or less than the agreed amount, it shall be deemed as a change of the agreed amount of deposit.

Article 587

If the debtor performs the debt, the deposit shall be used as the price or recovered. If the party paying the deposit fails to perform the debt or the performance of the debt is not in conformity with the agreement, thus the purpose of the contract cannot be achieved, it has no right to request the return of the deposit; If the party receiving the deposit fails to perform the debt or the performance of the debt does not conform to the agreement, so that the purpose of the contract cannot be achieved, the deposit shall be returned twice.

Article 588

If the parties agree on both liquidated damages and deposit, when one party breaches the contract, the other party may choose to apply the liquidated damages or deposit clause.

If the deposit is not enough to make up for the losses caused by one party's breach of contract, the other party may demand compensation for the losses exceeding the deposit amount.

Article 114 of the Contract Law, 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 damages arising from breach of contract.

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 excessively higher than the losses caused, the parties may request the people's court or arbitration institution to reduce them appropriately.

The Supreme People's Court's Interpretation of Several Issues Concerning the Application (II) Article 27 If a party requests the people's court to adjust the liquidated damages in accordance with the provisions of the second paragraph of Article 114 of the Contract Law by way of counterclaim or defense, the people's court shall support it.

Article 28 Where a party requests the people's court to increase the liquidated damages in accordance with the second paragraph of Article 114 of the Contract Law, the amount of the increased liquidated damages shall not exceed the actual loss. If the other party requests compensation after the penalty is increased, the people's court will not support it.

Article 29 If the parties claim that the agreed liquidated damages are too high and request an appropriate reduction, the people's court shall, according to the actual losses, comprehensively consider the performance of the contract, the degree of fault of the parties, the expected interests and other comprehensive factors, and make a ruling after weighing according to the principles of fairness, honesty and credibility.

If the liquidated damages agreed by the parties exceed 30% of the losses caused, it can generally be regarded as "losses caused by excessive exceeding" as stipulated in the second paragraph of Article 114 of the Contract Law.