Legal information

Is it legal for a lease contract to have no liability for breach of contract?
Liability for breach of contractual obligations is statutory. Even if there is no breach of contract clause in the lease contract, the non-defaulting party can still require the defaulting party to bear liability for breach of contract.

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How is the amount of the penalty determined? According to the provisions of the Civil Law, the amount of liquidated damages is determined by negotiation between the two parties. However, if the agreed liquidated damages are lower than the losses caused, the court or arbitration institution may increase the compensation according to the request of the parties; if the agreed liquidated damages are too high and exceed the losses caused, the court or arbitration institution may grant appropriate relief according to the requirements of the parties.

Article 585 of the Civil Code of the People's Republic of China: The parties may agree that when one party breaches the contract, he shall pay a certain amount of liquidated damages to the other party based on the circumstances of the breach of contract, and may also agree on a method for calculating the amount of compensation for losses caused by the breach of contract. If the agreed liquidated damages are lower than the losses caused, the people's court or arbitration institution may increase it at the request of the party; if the agreed liquidated damages are excessively higher than the losses caused, the people's court or the arbitration institution may appropriately reduce it according to the request of the party.

If the parties agree on liquidated damages for delayed performance, the defaulting party shall also perform its debts after paying the liquidated damages.

The legal knowledge in this article does not represent legal advice. If you encounter similar problems, you should analyze them in detail. If you want to know more about this, you can consult with lawyer Ying Ting one-on-one.