I. overdue payment
overdue payment includes the act of not paying the price within the agreed time limit or the time limit stipulated by law, which is a breach of contract, and it shall bear the corresponding liability for breach of contract in accordance with the contract or the provisions of laws and administrative regulations.
II. The standard of liquidated damages for overdue payment
If the liquidated damages agreed upon 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 agree to pay liquidated damages for delay in performance, the breaching party shall also perform the debt after paying the liquidated damages. In the trial of related cases, how to determine the standard of calculating liquidated damages is an unresolved issue. In 1993, the Higher People's Court of Heilongjiang Province submitted a request for instructions on the calculation ratio of liquidated damages for delayed payment to the Supreme People's Court, and in March 1994, the Supreme People's Court made a reply to the Higher People's Court of Heilongjiang Province on the basis of what standards should be used to calculate liquidated damages for delayed payment. According to the provisions of the People's Bank of China on the deduction of overdue payment fines, this reply replied: "The liquidated damages for overdue payment stipulated in the Economic Contract Law and its relevant regulations shall be calculated at three ten thousandths of the overdue payment amount per day." However, this standard for calculating overdue payment soon failed to meet the actual situation.
Therefore, the Higher People's Court of Heilongjiang Province asked the Supreme People's Court for instructions on the same issue in 1996, and the Supreme People's Court made a reply to the Higher People's Court of Heilongjiang Province on May 16, 1996 on the basis of what standards should be used to calculate the liquidated damages for overdue payment. The reply still stipulates that the calculation standard of liquidated damages for overdue payment is five ten thousandths of the overdue payment amount per day according to the relevant regulations of the People's Bank of China. With the adjustment of relevant financial policies, the standard for calculating liquidated damages for overdue payment determined in this reply is far from reality, so the Guangdong Higher People's Court asked the Supreme People's Court for instructions on the same issue in 1998. In this way, on February 16th, 1999, the Supreme People's Court published the Reply on the Criteria for Calculating the Default Penalty for Late Payment (hereinafter referred to as the Reply).
The Reply stipulates that if the parties to a contract have not agreed on the standard of liquidated damages for overdue payment, the people's court may calculate the liquidated damages for overdue payment with reference to the standard of charging interest on overdue loans for financial institutions stipulated by the People's Bank of China. When the People's Bank of China adjusts the standard for financial institutions to collect interest on overdue loans, the people's court may adjust the calculation standard for calculating liquidated damages for overdue payment accordingly.
III. The Reply has the following two characteristics:
First, the established standard for calculating liquidated damages for overdue payment is consistent with the principle of the Supreme People's Court's previous reply and reply with reference to the standard for financial institutions to collect overdue loan interest stipulated by the People's Bank of China. In fact, in the absence of clear provisions in laws and administrative regulations, the determination of the standard of liquidated damages for overdue payment is made by the court to supplement the matters to be specified in the contract or to infer the relevant wishes of the parties, instead of the Supreme People's Court filling the missing contents of the contract instead of the parties. The behavior of overdue loan repayment is actually a typical form of overdue payment, and it is also a form with the largest number. The interest charged on overdue loans includes not only the interest receivable by financial institutions, but also the penalty component, that is, the part equivalent to liquidated damages. Therefore, the standard of collecting interest on overdue loans is of great reference value to the calculation of liquidated damages for other overdue payments.
second, the standard of the people's court for calculating the liquidated damages for overdue payment changes with the change of the standard of the People's Bank of China for collecting overdue interest. In this way, there is no need for the Supreme People's Court to issue a special judicial interpretation. Although the relevant standards established by the People's Bank of China are used as the standard for calculating the liquidated damages for overdue payment in the Supreme People's Court, generally speaking, the judicial interpretation in the Supreme People's Court is always lagging behind, which is not conducive to correctly handling the disputes about the rights and obligations of the parties.
The "Reply" refers to the provisions of the Notice on Reducing the Interest Rates of Deposits and Loans of Financial Institutions issued by the People's Bank of China on April 3, 1996. At present, the standard of liquidated damages for overdue payment can be calculated at four ten thousandths of a day "is an example made when this reply was published. But this example still lags behind the relevant regulations of the People's Bank of China. Therefore, on November 15, 2, the Supreme People's Court promulgated the "On Amending". In addition, unless the parties have clearly agreed on the termination date of the calculation of liquidated damages for overdue payment, the people's court shall calculate the liquidated damages for overdue payment until the date when the judgment determines the payment.
to sum up, if a party breaches the contract, the liquidated damages shall be paid according to the agreement if there is an agreement; if there is no agreement, there is no need to pay the liquidated damages. The creditor may demand compensation for the losses, but it shall provide evidence that the other party's overdue payment has caused losses to itself, and bear the liability for breach of contract for overdue payment from the date when the parties agree or the law stipulates that the money should be paid.
Legal Basis
Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Disputes over Commercial Housing Sales Contracts
Article 12 Where a party requests a reduction on the grounds that the agreed liquidated damages are too high, it shall make an appropriate reduction on the basis that the liquidated damages exceed 3% of the losses caused; Where a party requests an increase on the grounds that the agreed liquidated damages are lower than the losses caused, the amount of liquidated damages shall be determined based on the losses caused by the breach of contract.