[Direct answer]In the Beijing area, in principle, it is not allowed to claim for damages twice, but it is possible to claim for the difference in compensation. According to Article 85 of the Civil Code of the People's Republic of China (effective from January 1, 2021), the parties may agree on a penalty clause or a method of calculating the amount of compensation for losses; if the agreed penalty is lower than the actual losses, the parties may request the people's court or arbitration institution to increase it; if the agreed penalty is excessively high compared with the actual losses, the parties may request a reasonable reduction. In practice, those who claim for penalties usually do not claim for compensation for losses twice. If the penalty is insufficient to compensate for the losses, they may request an increase to the amount of losses; if no penalty clause is agreed upon, they may claim compensation based on the actual losses. The action aim is to evaluate the agreement and the actual losses, and to choose the more favorable claim right.

1. Problem background and typical scenarios

The other party breached the contract. I want to claim the breach of contract penalty and also want them to compensate for the losses. Can I claim both at the same time? This is a very practical issue in contract disputes. The law has clear rules regarding the relationship between the breach of contract penalty and the compensation for losses: the two usually cannot be simply added together, but they can be interconnected and the difference can be made up.

II. Key points of dispute

First, can the penalty for breach of contract and compensation for losses be used concurrently? Second, the rule for increasing the penalty for breach of contract when the actual losses exceed the contractually agreed amount. Third, the relationship between the penalty for breach of contract and the deposit, as well as compensation for losses. Fourth, the scope of losses and the rule of foreseeability. Fifth, the application of the agreed method of calculating compensation and the statutory compensation.

III. Professional analysis by Henglue Lawyers

The relationship between the penalty for breach of contract and compensation for losses can be summarized as "choosing one as the main basis and making up the difference". In China, the main function of breach of contract liability is compensation, and the nature of the penalty for breach of contract is primarily compensatory and supplemented by punitive measures. According to Article 585 of the Civil Code of the People's Republic of China, the parties may agree on the calculation method of the penalty for breach of contract or the amount of compensation for losses; if the penalty for breach of contract is lower than the losses, the party may request an increase; if it is excessively high, the party may request a reduction; and Article 584 stipulates that the amount of compensation for losses shall be equivalent to the losses caused by the breach of contract, including the benefits that could be obtained after the performance of the contract, but shall not exceed the losses that the breaching party foresaw or should have foreseen at the time of concluding the contract. This rule has been repeatedly confirmed in contract cases handled by Henglue Law Firm. Firstly, in an arbitration case of a commissioned creation contract, the lawyer claimed the contract price, the penalty for late payment, and the attorney's fees, and the arbitration tribunal adopted the main opinion and fully supported the attorney's fees, while adjusting the claim for the penalty for breach of contract. Secondly, in a dispute over a preliminary contract for shop leasing, the lessor claimed compensation for losses such as decoration amounting to more than 700,000 yuan. The court determined the decoration losses based on actual expenditure and causality, and did not support the unstipulated or unproven parts. Thirdly, in a dispute over an online service contract, the counterclaim for the penalty for breach of contract was entirely rejected because there was no penalty clause in the contract, but the request for a refund based on the fact of termination was supported. These cases suggest that when claiming rights, we should first check whether the contract stipulates a penalty for breach of contract and a calculation method for compensation; if there is a stipulation, the penalty for breach of contract shall generally be the main basis, and if the losses are too large, the claim for an increase shall be made; if there is no stipulation, the claim shall be based on the actual losses and the foreseeability rule. In practice, the penalty for breach of contract and the deposit cannot be used concurrently, and one of them shall be chosen for application. This case is handled by Beijing Henglue Law Firm.Xiong BinrongThe attorney (practice certificate number: 11101202211410897, subject to the certificate issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Action List: 1. Check whether the contract stipulates a penalty clause or a method for calculating compensation for losses; 2. If a penalty clause is stipulated, prioritize the penalty clause. If the actual losses exceed the penalty amount, the party may request an increase in compensation; 3. If no penalty clause is stipulated, claim compensation based on the actual losses and the rule of foreseeability; 4. Note that the penalty clause and the deposit cannot be used concurrently—only one can be claimed; 5. Organize evidence around the amount of losses, causality, and foreseeability. Main Legal Basis: Articles 854, 855, and 856 to 888 of the Civil Code of the People's Republic of China (effective since January 1, 2021); Specific applications shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglue Law Firm's Advice

Three statements about penalties and compensation: Generally, one of them is chosen and not used in combination; if there is an agreement, the penalty shall be the main basis, and if it is insufficient, it can be increased; if there is no agreement, the claim shall be based on the actual loss and foreseeability. For enterprises involved in commercial and contract disputes, they can resolve the disputes through legal means.Business and contract disputes in enterprisesThe service provides a comprehensive solution, which includes the recovery of funds and the implementation of enforcement measuresCreditor's rights and debts, and enforcementFor reference, you can check the sections related to property and project lossesProperty transactions and construction projectsFor any questions regarding corporate law, please feel free to consult us.Intellectual property and corporate lawFor any questions or difficult situations, please contact the team.Special servicesTeam.

VI. Frequently Asked Questions

Q1: Can the breach of contract penalty and compensation for losses be claimed simultaneously?

Generally, a claim cannot be repeated. Where there is an agreement on the penalty for breach of contract, the penalty shall be the main basis for claiming compensation. If the penalty is insufficient to compensate for the losses, the party may request to increase it to the amount of the losses.

Q2: What evidence is needed to claim compensation for losses?

It is necessary to provide evidence of the facts of the breach of contract, the occurrence and amount of the actual losses, the materials showing the causal relationship between the losses and the breach of contract, and the relevant proof of the foreseeability of the losses at the time of contract signing.

Q3: How much does it cost to resolve such disputes?

The litigation fees shall be paid in accordance with the standards for property cases, which are related to the amount of the claim. Separate fees will be charged for losses determined through audits and appraisals, and the specific fees shall be subject to the approval of the court and the relevant institutions.

Q4: How long does it take from filing a lawsuit to obtaining a verdict?

The first-instance ordinary procedure usually lasts several months, and it will take longer if it involves appraisal or appeal. Organizing evidence adequately can help improve efficiency.

Q5: If there's no agreement on the breach of contract penalty, can I still demand compensation?

Yes. You can claim compensation based on the actual losses, including the benefits that could have been obtained after the contract was performed, but the compensation shall be limited to the losses that the breaching party could have foreseen when entering into the contract.

The above content is based on the compilation of judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglu Law Firm for specific cases.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Corporate commercial legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.