After Li signed an agreement with a media company in Huadu District, Guangzhou, Guangdong Province, Li began to work as an anchor on the platform.
Later, Li stopped working due to illness. To this end, the media company sued Li in court, demanding that Li pay a liquidated damages of 200,000 yuan. A few days ago, the Guangzhou Intermediate People's Court tried the case in accordance with the law, which reminded the platform enterprise that when signing an acting agency agreement with the anchor, it cannot "ask for a price in the sky", and the excessively high liquidated damages may not be protected by law.
【Case Review】
On July 8, 2019, a media company and Li signed the "Anchor Performing Arts Brokerage Agreement", stipulating that the cooperation period between the two parties is two years, and Li "shall not have an average daily length of not less than 6 hours per month for live broadcasting of performing arts on the Internet performing arts platform, and shall not be less than 26 days per month for live broadcasting of performing arts on the Internet performing arts platform", and "if one party unilaterally proposes to terminate this agreement or fails to perform the obligations required by this agreement without reason (one month is the time limit), it shall compensate the other party for liquidated damages of 200,000 yuan".
In November 2020, Li stopped broadcasting and refused to perform the contract. The company believes that according to the calculation of the contract, Li should pay more than 400,000 yuan in liquidated damages, and the company comprehensively claims liquidated damages of 200,000 yuan according to other circumstances such as Li's income during the live broadcast.
【Trial Process】
In court, Li believed that the liquidated damages claimed by the company were too high. First of all, the Anchor Performing Arts Agency Agreement he signed with the media company was a standard contract without any negotiation process. In March 2020, he applied for leave to the company due to physical discomfort, and then applied for resignation due to the deterioration of his physical condition. However, the company refused to respond to its resignation request by means of mutual prevarication. Moreover, the company has not conducted any training, packaging or promotion of Li.
The court held that there was no evidence in this case to show that the company had breached the contract and could not continue to perform the contract, and Li unilaterally proposed to terminate the contract, violating the contract. According to the first paragraph of Article 114 of the Contract Law, "the parties may agree that when one party breaches the contract, it shall pay a certain amount of liquidated damages to the other party according to the circumstances of the breach, and may also agree on the calculation method of the amount of compensation for losses arising from the breach." Although the two parties agreed in the Anchor Performing Arts Agency Agreement that if one party defaults, it shall compensate the other party for liquidated damages of 200,000 yuan. However, the court held that the company's losses were mainly its investment in Li and the expected benefits for the parties to continue to perform the contract. In this case, the company's investment in the defendant was not significant, and at the same time, the amount of benefits that the company expected to receive depended on many factors, including the company's brokerage ability, resources, anchor qualifications and even opportunities, the development of the industry, etc., with strong uncertainty.
In view of the fact that Li submitted medical records to prove that he did have symptoms such as arrhythmias during the performance of the contract, and it was not suitable to engage in the performing arts activities involved in the case for a long time, the company also knew about Li's violation of the performance time during the performance of the contract and did not put forward a contrary opinion.
Based on the principles of fairness and good faith, and taking into account factors such as the nature of the contract involved in the case, the input costs, the performance of the case, and the losses caused by the breach, the plaintiff claimed that the liquidated damages of 200,000 yuan were obviously too high. The court of first instance ruled that Mr. Li should pay a liquidated damages of 20,000 yuan to a media company within 10 days from the effective date of this judgment.
The company was not satisfied and appealed to the Guangzhou Intermediate People's Court.
【Trial Result】
The appeal was dismissed and the original judgment was upheld.
Case by case
Article 151 of the Civil Code stipulates that if one party takes advantage of the other party's situation that it is in a state of distress and lacks the ability to judge, resulting in a civil juristic act being manifestly unfair when it is established, the injured party has the right to request the people's court or arbitration institution to revoke it.
The judge pointed out that in this case, Li did have a breach of contract, but the company claimed that the liquidated damages of 200,000 yuan were obviously too high, and although the two parties agreed on the liquidated damages clause in the agreement, they were not protected by law because the agreement violated the principles of fairness and good faith.
Author: Ye Xiaozhong Correspondent He Yongwen
Source: Rule of Law Daily