Loss Compensation

Loss Compensation in foreign trade refers to the legal remedy by which the aggrieved party has the right to claim financial compensation from the liable party when one party's breach of contract or negligence causes actual loss to the other party. It is commonly found in sales contracts, transport contracts, insurance contracts, etc. Usage scenarios include delayed delivery by the seller, non-conforming goods quality, refusal of payment by the buyer, cargo loss or damage by the carrier, etc. Precautions: The claimant must prove the existence of the loss, its amount, and the causal relationship with the breach; the scope of compensation is usually limited to actual losses and does not include punitive damages unless explicitly agreed in the contract; attention should also be paid to exemption clauses, force majeure clauses, and the limitation period for claims. Unlike 'liquidated damages,' which are a pre-agreed fixed amount, loss compensation must be calculated based on actual losses; it is similar in meaning to 'damages,' but 'loss compensation' emphasizes filling specific losses. Foreign trade practitioners should specify the calculation method, liability limits, and claim procedures in the contract, and retain relevant evidence.