Will you be prosecuted for not paying the liquidated damages for free?

Some big companies will be sued. Free prosecution also has costs. If the quantity is too small and uneconomical, it can be blacked out. The probability of being sued is very high, and big companies have legal departments. If they are sued, they may go to the credit bureau, so there will be big trouble. The consequence is that the deposit cannot be refunded, resulting in subsequent deductions. The penalty for renting a house has been reflected in the deposit paid when signing the lease contract.

legal ground

Article 16 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Laws in the Trial of Disputes over Commercial Housing Sales Contracts is based on the principle of adjusting it to 130% of the actual loss to reflect the punitive nature of liquidated damages. The law does not clearly stipulate the maximum amount of liquidated damages. Article 12 1 of the Supreme People's Court's Interpretation on Several Issues Concerning the Application of the Guarantee Law of People's Republic of China (PRC) stipulates that if the amount of the deposit agreed by the parties exceeds 20% of the amount of the subject matter of the main contract, the people's court will not support it.

Article 465 of the Civil Code of People's Republic of China (PRC) * * * Contracts established according to law shall be protected by law. A legally established contract is legally binding only on the parties, except as otherwise provided by law.

Article 23 of the Civil Procedure Law of People's Republic of China (PRC) shall be under the jurisdiction of the people's court of the defendant's domicile or the place where the contract is performed.