On Liability to Pay Compensation for Breach of Contract

Liability to pay Compensation for breach of contract belongs in nature to civil liability. Comparing the legislation at home and abroad in combination with judicial practices, the author elaborates the liability and sets forth his own opinions on it from three aspects.In terms of its components,it is similar to liability of damage,requiring an act in breach of contract, the result of damage and the cause and effect relationship between the two. The difference is that the liability to pay compensation for breach of contract adopts the principle of liability without mistakes, requiring“full compensation”regarding the liability′s limitation of suit, including direct and indirect losses. However, it sets “foreseeable rules and “reduction of damage rules as a restriction .The way of undertaking the liability is the amount of damage while the contractual fine can be changed into the amount of loss only when it is increased or reduced by the People′s Court or an organization of arbitration through application, thus becoming the mode of liability.