First of all, the contract law stipulates
Article 1 14 of the Contract Law stipulates that the parties may agree that one party shall pay a certain amount of liquidated damages to the other party according to the situation of breach of contract, or agree on the calculation method of the amount of damages caused by breach of contract. Therefore, the penalty is punitive, and it is 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. However, if it is too high or too low, you can ask the court to reduce or increase it.