Current location - Trademark Inquiry Complete Network - Tian Tian Fund - The difference between initial margin and default fund
The difference between initial margin and default fund
A: The security deposit is the security deposit, which was paid in advance. Liquidated damages are the responsibilities that the parties must bear because they have violated their previous commitments and obligations, and they must be paid afterwards.

Margin refers to all kinds of deposits deposited in banks and other financial institutions. Under the background of the lack of clear legal norms of deposit, it is necessary to discuss the types of deposit, and define the deposit of reserve fund, advance payment, lease, decoration, deposit, deposit with return right and deposit with unparalleled return effect respectively to determine their respective legal effects.

The payment amount of liquidated damages is determined according to the breach of contract, that is, the agreement on liquidated damages should estimate the losses that may be caused to the other party by one party's breach of contract, and the amount of liquidated damages that is not commensurate with the original losses shall not be agreed. On the other hand, if the amount of liquidated damages agreed by the parties is lower than the losses caused by breach of contract, the parties may request the people's court or arbitration institution to increase it appropriately; Liquidated damages are not only a form of liability, but also a unique way to ensure the performance of the contract. If liquidated damages are stipulated in the contract, the party who intends to breach the contract will measure the consequences of its breach. If the liquidated damages are obviously punitive, especially if the liquidated damages exceed the benefits brought by breach of contract, any rational person will choose to continue to perform the contract after weighing the pros and cons. Therefore, liquidated damages have the nature of guarantee, and the greater the punishment, the stronger the guarantee effect.

Classification of liquidated damages 1. According to the basis of liquidated damages, liquidated damages can be divided into statutory liquidated damages and agreed liquidated damages; 2. According to the purpose of agreed liquidated damages, liquidated damages can be divided into compensatory liquidated damages, punitive liquidated damages and limited liability liquidated damages. 3. According to whether it is a specific breach of contract, the agreed liquidated damages can be divided into general liquidated damages and specific liquidated damages.