Liquidated damages under the Law of some Countries – Experience for Viet Nam

Abstract

Liquidated damages in English have existed both in Anglo-American legal system and continental European legal system for a long time. In Vietnam, the clause of liquidated damages in contracts is increasingly common and often negotiated by involving parties during transactions of business or commerce and construction, especially in the transactions of great value and the loss of one party is difficult to prove actual and direct damages. However, according to the law as well as the judicial practice, the validity of liquidated damages clause has not been clearly and consistently recognized. This article analyzes the conception and the nature of liquidated damages clause in Anglo-American legal system, especially in the United Kingdom and the United States, and continental European legal system, mainly in the law of France, then analyzes the provisions of law and the practice of dispute settlement of liquidated damages clause at the Court and commercial Arbitration in Vietnam, thereby providing the fundament for the recognition of liquidated damages clause in Vietnam, especially the completion of the provision of the current commercial Law.