Practical application of law regarding penalties for breaches in commercial contracts

Abstract

In commercial activities, a commercial contract serves as the foundation for establishing the rights and obligations of the participating parties. The 2005 Commercial Law enacted a legal framework for remedies for contractual breaches, among which, penalties for breach are of particular interest due to their nature as a rigorous monetary sanction intended to deter non-compliance. This article analyzes and evaluates the practical application of the law regarding penalties for breach in commercial contracts and provides recommendations for improvement.