Common use of Defaulting Liabilities Clause in Contracts

Defaulting Liabilities. In the event that either party breaches this Contract, it shall undertake the defaulting liabilities and pay default penalty to the other party. If default penalty cannot cover the losses due to such default, the defaulting party shall make up the deficit. If default penalty are excessively higher or lower than actual losses, either party may request people’s court or arbitration institute to decrease or increase default penalty appropriately. 9.1 In case either party fails to perform this Contract in whole or in part (in case of delayed delivery or insufficient delivery by the Seller, in reference to Article 9.2), the Seller shall pay the other party the default penalty at a rate of 0.5% of the total value of the goods involved in such default. If both parties negotiate to change or terminate this Contract, neither party is deemed to breach the Contract. 9.2 If the Seller delays delivery or that delivered goods are insufficient, the Seller shall pay the Buyer the default penalty at a rate of 1% of the total value of this batch of goods. If the Buyer does not collect goods according to delivery term or rejects qualified goods, it shall pay the Seller the default penalty at a rate of 1% of the total value of this batch of goods. If either party intends to increase or decrease contractual quantity or change the delivery term, it shall give a 10 days prior notice and obtain the consent of the other party; otherwise, it shall undertake economic liabilities. 9.3 The expenses actually paid by the Buyer during the custody period due to the mis-delivery by the Seller shall be borne by the Seller. In case that the Buyer delays payment, it shall pay the Seller the default penalty for overdue payment in accordance with the relevant regulations of the People’s Bank of China. 9.4 The default penalty, compensation, custody and maintenance expenses and various economic losses payable by either party shall be paid to the other party within 10 days after responsibilities are defined. Otherwise, such party will be punished for overdue payment. However, neither party shall offset relevant fees by withholding goods or deducting payment for goods.