1. liquidated damages refer to the money that one party should pay to the other party in case of breach of contract according to the agreement of the parties or the direct provisions of the law. The standard of liquidated damages is money, but the parties may also agree that the subject matter of liquidated damages is other property than money. Liquidated damages can guarantee the performance of debts, punish the defaulter and compensate the losses of the innocent party. Therefore, some countries regard it as one of the measures to guarantee the contract, and some countries regard it as a way to bear the responsibility for breach of contract. When one party in no performance at all fails to perform its debts, it must pay a certain amount of money or other property other than money to the other party as agreed. Liquidated damages is a kind of contract economy, and it is also an economic sanction for breach of contract. The establishment of liquidated damages is to ensure the performance of debts. Even if the other party has not suffered any property losses, it should pay liquidated damages according to the provisions of the law or the contract. The standard of liquidated damages shall be determined by both parties according to law or agreed in writing in the contract.
2. There are two kinds of liquidated damages: ① Punitive liquidated damages, whose function is to punish. If property losses are caused to the other party due to breach of contract, the breaching party shall pay liquidated damages and compensate the other party separately. (2) Compensatory liquidated damages are the pre-estimation and payment of the property losses that one party may suffer due to the other party's breach of contract, that is, the breaching party is exempted from the responsibility of compensating the other party's property losses; Even if the loss is greater than the liquidated damages, it will not be compensated. Article 583 of the General Principles of the Civil Law of People's Republic of China (PRC): "If one party fails to perform its contractual obligations or fails to comply with the contract, and after performing its obligations or taking remedial measures, the other party has other losses, it shall compensate for the losses."
3. Interest refers to the use fee of money in a certain period of time, and refers to the remuneration that the money holder (creditor) gets from the borrower (debtor) for lending money or monetary capital. Including deposit interest, loan interest and interest generated by various bonds. Under the capitalist system, the source of interest is the surplus value created by hired workers. The essence of interest is a special transformation form of surplus value and a part of profit. Abstract interest point refers to the value-added amount brought by monetary funds injected into the real economy and returned. Generally speaking, interest refers to the remuneration paid by the borrower (debtor) to the lender (creditor) for using the borrowed currency or capital. Also known as the symmetry of sub-fund and parent fund (principal). The calculation formula of interest is: interest = principal × interest rate × deposit period (i.e. time).