About compensation in civil cases?

Compensation for losses is legal and impossible to stipulate, so there is no question of negotiation. However, the parties to a contract may stipulate the calculation method and standard of loss compensation in the contract.

The legal principle of compensation for losses is very complicated. We can't simply say whether it includes profits, but it depends on specific cases.

However, it is generally believed that the calculation of compensation for losses in a contract is based on the losses that both parties should know or predict when signing the contract.

For example, you are going to a place to sign a huge business. If you don't arrive at the scheduled time, you may lose one million yuan due to real-time price changes, so you go to the airport to buy a plane ticket and fly to that place. It's a pity that the plane was delayed for various reasons, which directly led to your failure to get business and a loss of one million. But what will the airport compensate you? The airport can only compensate you for air tickets, delayed accommodation and other foreseeable losses when both parties sign an air passenger contract with you.

If the airport bears the losses that you can predict personally, there will be no airport in the world, because every guest who misses the plane may have many unpredictable losses at the airport. How does the airport undertake such a huge risk contract?

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The following cases are too complete and complicated for illegals to understand.

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What is compensation for losses?

The so-called loss compensation refers to a form of liability for breach of contract in which the parties to a contract fail to perform their contractual obligations or the performance of their contractual obligations does not conform to the agreement, resulting in the loss of the other party's property, and the defaulting party compensates the other party's property loss with its property. Compensation for losses is the most important remedy for breach of contract, which is recognized by all countries in the world. It applies not only to the liability for breach of contract, but also to the losses caused by tort and other civil tort. It is not only applicable to the breach of valid contracts, but also to the damages caused by invalid contracts. The compensation loss studied in this paper only refers to the compensation loss caused by breach of contract.

Characteristics of loss compensation

1. Compensation for breach of contract is a form of liability caused by the breaching party's breach of contract obligations. The premise of damages for breach of contract is that there is an effective contractual relationship between the parties, and the breaching party has violated the obligations stipulated in the contract. One party violates the obligations not stipulated in the contract, or the contract is not established, the contract is invalid, and the contract is cancelled. Should bear other responsibilities, such as the fault of concluding a contract, rather than being liable for the loss of the contract.

2. The liquidated damages are compensatory. Compensation for breach of contract is a kind of compensation for the losses suffered by the breaching party to the non-breaching party. Generally speaking, the compensation for losses caused by breach of contract shall be based on the losses caused by breach of contract. This is different from the liability for breach of contract such as down payment and liquidated damages.

3. The compensation for breach of contract is arbitrary. China's "Contract Law" allows the parties to the contract to agree on the calculation method of liquidated damages in advance, or directly agrees that the breaching party should pay a certain amount of money to the non-breaching party, which embodies the principle of freedom of contract.

4. The principle of compensation for breach of contract losses is to compensate all the actual losses of the non-breaching party. If one party breaches the contract, the other party will suffer property losses and loss of available benefits, and these losses should be compensated.

Principle of loss compensation

If a party to a contract breaches the contract and causes damage to the other party, it shall compensate for the loss according to law, and the following principles shall be followed:

(1) principle of full compensation

The so-called principle of full compensation refers to all the losses suffered by the victim due to the breach of contract by the breaching party, and the breaching party shall be liable for compensation. In other words, the breaching party should not only compensate the other party for the decrease of real estate caused by its breach of contract, but also compensate the other party for the performance benefits obtained from the performance of the contract. Full compensation is an effective measure to fully protect the interests of victims. Starting from the principle of fair and equal exchange, if the victim suffers damage due to the breach of contract by the breaching party, the breaching party should also compensate all the damage with its own property. Of course, the "total compensation" in the contract law refers to the compensation for all the property losses suffered by the victims, and such compensation should be limited to the reasonable scope stipulated by law.

The principle of full compensation is the principle of compensation for breach of contract often used in contract laws of various countries. China's civil legislation has also adopted principle of full compensation. According to Article 1 13 of the Contract Law, the amount of damages shall be equivalent to the losses caused by the breach of contract, including the benefits that can be obtained after the performance of the contract. Our country has adopted the practice of civil law countries, and the loss only refers to property loss. In addition, does the loss include indirect loss? What is indirect loss? Is the loss of available benefits a direct loss or an indirect loss? It is controversial among scholars. According to the principle of full compensation, the breaching party should not only compensate all the losses suffered by the victim, but also compensate the loss of available benefits, including the loss of available benefits after the performance of the contract.

Direct loss is an existing loss, which can be said to be a "tangible" loss, and it is generally not controversial. The key is how to grasp the available benefits. The available interest refers to the interest that the creditor can realize or obtain after the performance of the contract. The available income has the following characteristics: (1) futurity. The available interest is not a real interest, but a future interest, which can only be obtained after breach of contract. (2) look forward to it. The available interest is the foreseeable interest of the parties when concluding a contract, and the loss of the available interest is also the foreseeable loss of the parties to the contract. (3) The available benefits are realistic. The benefits that can be obtained are not actually enjoyed when concluding a contract, but they are not imagined. If the defaulting party does not default, they are the benefits that the non-defaulting party can obtain.

(2) the principle of reasonable foresight

The principle of full compensation is a powerful protection for the non-breaching party, but starting from the basic principles of civil law, the scope of such damages should be limited to a reasonable range. Many countries and international conventions limit it to the foreseeable range. For example, Article 1 150 of the French Civil Code stipulates: "The debtor's failure to perform the debt is not caused by the debtor's fraudulent behavior, and the debtor is only liable for the damage or interest foreseen or likely to be foreseen when concluding the contract." This principle of French civil law has influenced British cases and is directly reflected in Hadley v. Ba Sen Del in 1854. 1949 the British court of appeal further confirmed and developed this principle in the case of Victoria Laundry v Newman Industrial Company, that is, the injured party is only entitled to the loss for breach of contract that was foreseen or foreseeable when the contract was concluded, and this loss has actually occurred. 1 Article 27 15 of the United States Uniform Commercial Code also confirms this principle, that is, such losses should be reasonably foreseen when concluding the contract. Article 74 of the United Nations Convention on Contracts for the International Sale of Goods also stipulates that damages should not exceed the possible losses expected or expected by the breaching party for breach of the contract based on the facts and circumstances he knew or should have known when concluding the contract.

Article 1 13 of China's Contract Law stipulates that the compensation for losses shall not exceed the losses foreseen or should be foreseen by the breaching party when concluding the contract. Judging from the provisions of this article, the contract law adopts the principle of reasonable foresight, also known as the foreseeable clause, which mainly includes the following contents: (1) The subject of foresight is the breaching party. (2) The foreseeable time is the time when the contract is concluded. (3) The foreseeing content is the scope of property losses that may be caused by breach of contract. (4) The criterion for judging whether the breaching party can foresee is the combination of subjective and objective, that is, the foresight ability of ordinary people in the same type of society is usually taken as the criterion.

(3) the principle of mitigating damage

The principle of mitigating damage, also known as the principle of taking appropriate measures to avoid loss expansion, means that after one party breaches the contract and causes damage, the victim must take reasonable measures to prevent the damage from expanding, otherwise the victim should be responsible for the expanded damage, and the breaching party has the right to request that the avoidable damage be deducted from the damages at this time. This rule has been recognized and adopted by contract legislation and precedents in various countries. However, the concepts and legal analysis used in different countries are quite different. The principle of civil law is the negligence liability for contract debts, so it is not directly based on the victim's violation of the obligation to mitigate the damage, but on whether the victim is at fault for the damage. If the victim fails to take reasonable measures to avoid or mitigate the damage, it constitutes "victim's fault" in German law or "victim's fault" in French law. Anglo-American law does not adopt the principle of negligence liability for breach of contract. As long as one party breaches the contract, whether it is at fault or not, it should be liable for damages. Therefore, Anglo-American law holds that the victim has the obligation to take reasonable measures to mitigate the damage. The United Nations Convention on Contracts for the International Sale of Goods adopts the legal analysis of Anglo-American law, stipulating that the victim "must" take measures to "reduce the losses caused by the other party's breach of contract". Article 77 of the United Nations Convention on Contracts for the International Sale of Goods stipulates: "The party who claims that the other party has not breached the contract must take reasonable measures according to the circumstances to reduce the losses caused by the other party's breach of the contract, including the loss of profits. If such measures are not taken, the breaching party may demand that the amount of losses that could have been mitigated be deducted from the damages. " The obligation to mitigate damages applies to claiming damages. When determining the amount of damages according to Articles 74, 75 and 76, the provisions of this Article shall be applied, and the mitigated damages shall be deducted, so that the breaching party shall bear reasonable responsibilities.

China's current relevant laws also regard mitigation of damage as an obligation of the victim, so as to limit the liability of the breaching party. For example, Article 22 of the former Foreign-related Economic Contract Law stipulates: "If one party suffers losses due to the other party's breach of contract, it shall take appropriate measures in time to prevent the loss from expanding; If appropriate measures are not taken in time to expand losses, there is no right to claim compensation for the expanded losses. " The provisions in Article 1 14 of the General Principles of the Civil Law are basically the same as those in the original Law on Foreign-related Economic Contracts, except for the deletion of "appropriate" in "taking appropriate measures". Article 1 19 of China's Contract Law also clearly stipulates that "after one party breaches the contract, the other party shall take appropriate measures to prevent the loss from expanding; If appropriate measures are not taken to expand the losses, no compensation shall be claimed for the expanded losses. The reasonable expenses incurred by the parties to prevent the loss from expanding shall be borne by the breaching party. "

From this, it can be seen that the principle of mitigating damage is a principle that our laws have always followed. In judicial practice, the constitutive elements of the principle of mitigation of damage should be clarified in order to better apply the principle. Specifically, the elements of the principle of mitigation of damage are:

(1) The damage was caused by the breaching party, and the victim was not at fault. In other words, the breaching party's breach of contract is the essential cause of the damage, which has nothing to do with the victim, so it does not constitute a breach of contract between both parties. Here we should distinguish two different concepts: mitigation of damage and mixed negligence. Usually, mixed fault means that both the offender and the victim are at fault for the occurrence of damage, that is, the fault of the offender and the victim jointly leads to the occurrence of damage results. However, if the victim violates the obligation of mitigation and causes damage, the victim is only liable for the damage caused by the failure to fulfill the obligation of mitigation.

(2) The victim failed to take reasonable measures to prevent the damage from expanding. It is the victim's duty to mitigate the damage. After the damage occurred, the victim should take reasonable measures to mitigate the damage and did not take it, which is the basis for his responsibility. But how should we determine that the victim did not take reasonable measures? There are three different views: the first view is that it should be determined by the standards of ordinary people. That is, what measures should ordinary people who were victims at that time take to avoid the expansion of the damage. The second view is that it should be decided by whether the measure is economically reasonable or not. The third view is that it should be determined by whether the victim is in good faith subjectively. All the above three viewpoints are reasonable, but they can't be generalized, because a single standard can't be adopted for a case, and it needs to be analyzed in detail. For example, the victim took measures to prevent the damage from expanding in good faith, but it may be unreasonable in economy or failed to prevent the damage from expanding objectively. In this case, it not only violates the principle of fault, but also is extremely unfair and unreasonable to the victim. Therefore, we should adhere to the principle of good faith, take good faith as the basis, and comprehensively consider various factors. Generally speaking, according to the situation at that time, the victim did his best to implement effective measures that people thought might prevent the damage from expanding. If the result of the act fails to prevent the damage from expanding, the victim should also be deemed to have fulfilled his obligations. At the same time, if preventive measures will seriously harm their own interests, or violate business ethics, or pay too high a price, the victims may not take such measures.

(3) The improper behavior of the injured party causes the damage to expand. That is, after the breach of contract occurs and causes damage, the damage continues to expand due to the improper behavior of the victim. However, even if the victim violates the obligation to mitigate the damage, the victim does not benefit from it. If the victim gains some benefits due to the breaching party's breach of contract, the principle of break-even should be adopted when determining the amount of damages.

(D) the principle of break-even

Break-even, also known as break-even sales. It means that when the victim obtains benefits based on the same cause of damage, he should deduct the benefits from the damage to determine the scope of the damage. That is, the breaching party only compensates for the difference. Adhering to this principle can better reflect the compensatory nature of civil liability and help balance the material interests between the parties.

Break-even is an important rule to determine the scope of responsibility. According to this rule, when the damage suffered by the victim and the benefit obtained are based on the other party's breach of contract, that is, the breach of contract not only damages the victim, but also benefits the victim, the court shall order the breaching party to compensate the difference between all the damage and the benefit obtained by the victim. Therefore, break-even is a rule to determine the net loss suffered by the victim due to the other party's breach of contract, and it is a rule to calculate the real loss suffered by the victim, rather than a rule to reduce the responsibility of the breaching party. It can be seen that profit and loss balance and mixed fault are also different. The former is a rule to determine the actual damage, and the latter refers to a rule that can reduce or exempt the liability for compensation when the victim is also at fault for the occurrence or expansion of the damage. In addition, the offset of profit and loss is not the mutual offset of two creditor's rights, so the offset rule of debt is not applicable and takes effect regardless of the will of the parties.

The balance of profit and loss is determined by precedent and theory, which is generally not found in the civil code or there is no general provision in the civil code. Its origin can be traced back to Roman law. German common law era also recognized this principle. Germany, Japan and other civil law countries all recognize this rule. There are relevant provisions in the German Civil Code. For example, Article 324 of the Code stipulates that "the benefits saved by exempting the payment obligation or obtained by using his labor for other purposes, or the benefits obtained by deliberately delaying, shall be deducted", and Article 6 15 stipulates that "the value saved by the laborer because of refusing to accept the labor service or the value obtained by moving to other places, or the value obtained by deliberately delaying" shall be deducted. China's "General Principles of Civil Law" and "Contract Law" do not stipulate the profit and loss balance rule, but based on the principles of good faith and fairness in civil law and contract law, this principle should be recognized. Specifically, the purpose of damages for breach of contract is to compensate the loss of the injured party, not to benefit the injured party. Because of the same breach of contract (compensation principle), there are both losses and gains. If the interests are not deducted, it is equivalent to letting the injured party benefit from the breach of contract, which violates the original intention and purpose of compensation for damages for breach of contract. Therefore, the break-even rule must be adopted.

In the compensation for breach of contract, the balance of profit and loss has the following elements: (1) The debt of compensation for breach of contract has been established. Profit-loss balance is the prerequisite for application, that is, only the debts that constitute damages for breach of contract need to determine the scope of damages, and profit-loss balance is precisely the factor that limits the scope of damages. (2) Breach of contract has caused damage and benefits, that is, breach of contract has not only caused damage to the injured party, but also brought benefits to the injured party. Damage and benefit are different results of the same breach of contract, and there is a causal relationship between breach of contract and damage and benefit.

(5) The principle of liability offset.

The principle of liability offset refers to the system of determining the scope of compensation according to the respective responsibilities of creditors and debtors. Article 120 of China's Contract Law stipulates: "If both parties breach the contract, they shall bear their respective responsibilities." That is, it embodies the principle of responsibility offset. At the same time, it needs to be clear that in the theory of contract law in China, liability offset is an image statement, which does not refer to the liability offset of the parties, but determines the liability for compensation on the basis of determining their respective responsibilities.

The constitutive requirements of the principle of liability offset are: (1) breach of contract by both parties. The applicable premise of the liability offset rule is that both parties should bear the liability for breach of contract, so both parties should bear the liability for breach of contract. This is an objective requirement. As long as there is an objective breach of contract, whether there is a fault subjectively or not, the fault offset rule can be applied. The reason for this is that China's liability for breach of contract is strict. At the same time, this is also the fundamental difference between liability offset in China and negligence offset in civil law system. (2) Both parties shall bear corresponding responsibilities. If both parties are in breach of contract, they shall bear their respective liabilities for breach of contract and cannot substitute for each other. On the basis of determining the scope and amount of their respective responsibilities, they can offset each other when determining the actual payment. This kind of offset is essentially the offset of responsibility, similar to the offset of debt. Of course, it is not caused by the parties' expression of will.

(six) the principle of punitive damages for commercial fraud

In view of all kinds of serious fraud in transactions, especially the serious fraud in selling fake and shoddy products, Article 49 of China's Consumer Protection Law clearly stipulates: "If an operator commits fraud in providing goods or services, he shall increase the compensation for the losses he has suffered according to the requirements of consumers, and the amount of compensation shall be doubled as the price of the goods purchased or the cost of receiving services." This establishes the punitive compensation system for commercial fraud in law.

The application of punitive damages shall meet the following conditions: (1) The operator has committed fraud in providing goods and services. Common fraudulent acts in consumer transactions include: directly selling counterfeit goods; Deliberately short weight; Jerry-building and Jerry-building in processing contracting; Stealing parts, falsely listing repair items, and increasing repair costs in repair services. (2) consumers are harmed. First of all, there must be the fact that consumers are harmed, that is, consumers believe the false information provided by operators and suffer property losses as a result. Secondly, the only victims are consumers, that is, people who buy goods or services for their daily needs. (3) Consumers require operators to bear punitive damages. Under the condition that the above conditions are met at the same time, the operator shall increase the compensation for the losses suffered by consumers, and the amount of compensation shall be twice the price of the goods purchased by consumers or the cost of receiving services.

Scope of loss compensation

The scope of compensation for losses can be directly stipulated by law or agreed by both parties. In the absence of special provisions in the law or otherwise agreed by the parties, all losses shall be compensated according to the principle of full compensation. Article 113 of the Contract Law stipulates: "The amount of damages shall be equivalent to the losses caused by breach of contract, including the benefits that can be obtained after the performance of the contract, but shall not exceed the losses that the breaching party foresaw or should have foreseen when concluding the contract." Losses include direct losses and indirect losses. Direct refers to the direct reduction of property. Indirect loss, also known as loss of interest, refers to the loss of expected interest. The expected income that can be obtained is called available income. Available profit refers to profit, not turnover. For example, the garage and the taxi driver agreed to repair the damaged Li Xia car in ten days, and the garage delayed the delivery for three days, so the driver can make a profit every day by driving a taxi, 200 yuan. Three days' welfare for 600 yuan. If the garage breaches the contract, it shall compensate 600 yuan for the indirect losses.

The proposition of available benefits needs to adhere to objective certainty, that is, the expected benefits are not only subjectively possible, but also objectively certain. Due to the occurrence of default, this interest is lost. If there is no default, this interest will be calculated according to the usual situation. For example, if a construction company delays the delivery of a commercial building 10 day, the operating profit of the commercial building 10 day is the available profit.

The claim of available benefits shall not be arbitrarily expanded. In this regard, Article 74 of the United Nations Convention on Contracts for the International Sale of Goods (1980) stipulates that the compensation for losses "shall not exceed the possible losses that the breaching party expected or should have expected for breach of the contract based on the facts and circumstances that he knew or should have known when concluding the contract." China's former Foreign Economic Contract Law and the former Technology Contract Law also have the same provisions. Article 19 of the original Foreign-related Economic Contract Law stipulates: "The liability of one party for breach of contract shall be equivalent to the losses suffered by the other party, but shall not exceed the losses that the breaching party should have foreseen when concluding the contract." Paragraph 2 of Article 17 of the original Technology Contract Law stipulates that "the liability of one party for breach of contract shall be equivalent to the losses suffered by the other party, but shall not exceed the losses that the breaching party should have foreseen when concluding the contract." The law restricts the arbitrary expansion of the scope of compensation through foresight. Vision has three elements:

(1) The subject of foresight is the defaulter, not the non-defaulter.

(2) The foreseeable time is the time when the contract is concluded, not the time when the contract is breached.

(3) The foreseeable content is the loss of breach of contract that should be foreseen when concluding the contract, and the unforeseeable loss is not included in the scope of compensation. For example, a passenger claimed that the plane was late, which caused him to delay a business and demanded compensation. Whether to delay the sale is unpredictable when the airline sells tickets, so indirect losses will not be compensated.

Method of compensating losses

Agreed compensation and statutory compensation

(1) agreed compensation. Agreed compensation, also known as the retention of compensation amount, is a subsidiary contract of the main contract, which means that the parties reserve a loss compensation amount or agree on the calculation method of compensation loss in the agreed compensation contract, and when one party breaches the contract and causes losses to the other party, they will make compensation according to the agreement. Agreed compensation is simple and easy, which can reduce the complexity of compensation loss calculation.

Agreed compensation is a subsidiary contract with conditions. Compensation for damages for breach of contract, if conditions are met, shall be paid in accordance with the contract. If the liquidated damages have not occurred and the conditions have not been fulfilled, the agreed compensation contract will not take effect and there will be no compensation.

The agreed compensation and the actual loss amount are often not exactly the same. Under normal circumstances, even if there are differences, the agreed compensation should be handled well. If the agreed compensation amount is too high or too low compared with the actual loss amount by obviously unfair, the claimant may request a reduction, and the compensated person may request an increase in the compensation amount.

(2) statutory compensation. Legal compensation refers to the amount of damages or the calculation method of damages directly stipulated by law.

The purpose of statutory compensation is mostly to protect the infringed weak. Especially in the field of consumption, in order to prevent operators from dominating the market and depressing the compensation amount, the law directly stipulates the compensation amount or calculation method. For example, the increase in compensation stipulated in Article 49 of the Consumer Protection Law is legal compensation.

Compensatory compensation and punitive compensation

Loss compensation can be divided into compensatory compensation and punitive compensation. Compensation for losses is mostly compensatory, and how much losses are caused. Punitive damages are penalties for breach of contract such as fraud. Punitive damages can be agreed by the parties, and there are also provisions in the law, such as the increase in compensation stipulated in the Consumer Protection Law.

Article 49 of the Law on the Protection of Consumers' Rights and Interests stipulates: "If a business operator commits fraud in providing goods or services, it shall increase the compensation for the losses it has suffered according to the requirements of consumers, and the amount of compensation shall be twice the price of the goods purchased by consumers or the cost of receiving services." This is a special provision made by Chinese laws to punish fraudulent acts such as fake goods. There are three ways to compensate for the loss: first, restitution, second, monetary compensation, and third, compensation instead of goods.

Restitution refers to the restoration to the original state before the damage occurred. For example, the borrower damaged the borrowed tape recorder and returned it to the lender after repairing it. The restoration here is to restore the original state. Another example is that the cashmere purchased is returned because of unqualified quality, and the return is to restore the original state. If you have to pay for the refund, you need to pay extra interest. For example, if the seller fails to deliver the goods after the buyer pays, the seller should pay interest on the purchase price in addition to refund.

In practice, it is often difficult to restore the original state after breach of contract, so it is easy to quote monetary compensation, which is the main way to compensate for losses. In the case of monetary compensation, if the defaulter has financial difficulties and no money, and the defaulter has other property, he can deduct the corresponding amount and replace the compensation with property, that is, replace the compensation with other property.

Calculation of loss compensation

Both monetary compensation and offset compensation involve the calculation of loss compensation. The key to the calculation of loss compensation is to determine the calculation standard of the subject matter price, which involves the type of the subject matter and the time and place of calculation.

The price of the subject matter of the contract can be divided into market price and special price. The price of general subject matter is determined according to the market price. Special subject matter is determined at a special price. The determination of special price often takes into account spiritual factors and is emotional. For example, Zou Zhongshou, a famous medical professor and former deputy director of Nanjing General Hospital of General Surgery Center of Nanjing Military Region, died 1996. His wife sent Zou Zhongshou's family photos and other ten photos with special significance to a printing company in Nanjing for amplification, and the printing company lost all the negatives. Although the printing agency admitted its mistake, it insisted on making compensation according to 2 yuan money for each negative. After accepting the case, the Xuanwu District People's Court of Nanjing held a public hearing. It is believed that the defendant is a photographic print, and the negative delivered by the customer should be properly kept. Due to poor management, the defendant lost ten historical negatives that could not be copied, which caused certain economic losses and mental trauma to the plaintiff and should be compensated. The defendant was ordered to compensate the plaintiff RMB 5,000 in one lump sum.

Calculate the price of the subject matter, but also determine the time and place of calculation. Prices are often different at different times and places. Usually, the default time is used as the calculation time to determine the price of the subject matter, and the default place is used as the calculation place to determine the price of the subject matter.

If the law stipulates or the parties agree on the calculation method of loss compensation, the amount of loss compensation shall be calculated according to this method. For example, the maritime law stipulates the calculation unit of the limitation of liability, which can be used to settle claims.