Ningbo divorce agreement agreed in the breach of contract and interest, the other party does not perform how to do.- Zhiheng Law Firm

The divorce certificate has been issued, and the agreement has been signed, yet the other party refuses to pay the agreed-upon compensation—some delay for several months, while others make one or two installments before ceasing payments altogether. To begin with the conclusion: Property-related provisions in a divorce agreement become effective upon registration of the divorce and are binding on both parties; if one party fails to comply, the other may directly file a lawsuit. If the agreement specifies a liquidated damages clause, courts will generally uphold it, though excessively unreasonable stipulations—such as a penalty of 0.5% per day for late performance—are likely to be substantially reduced; in practice, nearly half of such clauses result in discounted penalties. Conversely, if the agreement merely refers to “interest” without an underlying genuine loan relationship, courts typically do not recognize that interest and instead award liquidated damages.

Why is the "liquidated damages clause" in 1. divorce agreements often lowered?

1. Class case rule: about half support, nearly half lower

Some lawyers searched about 32 cases involving liquidated damages for divorce agreements in Shanghai courts in the past three years: 16 cases were fully supported, 15 cases were lowered as appropriate, and 1 case was rejected. It is evident that stipulating a liquidated damages clause does not guarantee full recovery of the amount.

2. Basis for lowering: Article 585 of the Civil Code

Article 585, paragraph 1: The parties may agree to pay a certain amount of liquidated damages to the other party in the event of a breach of contract, or they may agree on the method of calculating the amount of damages arising from the breach. Paragraph 2: If the agreed-upon liquidated damages are lower than the actual losses incurred, the people’s court or arbitration institution may, upon request of a party, increase them; if they are excessively higher than the actual losses, they may, upon request, be appropriately reduced. There are two key points: First, the benchmark for “excessively higher” is the actual loss; in practice, a threshold of exceeding the actual loss by 30% is generally used as a reference. Second, any reduction must be requested by the parties; the court will not review such matters on its own initiative. If you are sued, the defense should clearly put forward "liquidated damages are too high, request to lower.

3. Why are the liquidated damages for divorce agreements more likely to be "discounted"

The adjustment of liquidated damages in commercial contracts is relatively restrained, while divorce agreements deal with the liquidation of the property of a marriage, and the court tends to consider that cash compensation and property discounts are attached to the division of common property, and it is not appropriate to apply the high interest rate of commercial borrowing. Shanghai Second Intermediate Court (2020) Shanghai 02 Min Zhong No. 9716 said directly: this case is a dispute arising from the division of common property, not commercial lending, according to the rules of commercial lending to determine the breach of contract is not appropriate.

4. The reduction is often very large.

The following table shows some cases of reduction by Shanghai courts (according to public judgment documents):

51| 200000 yuan | 10000 yuan |

The law is very clear: the daily accumulation, the punishment color heavy (how much money per day, hundreds of percent of the unpaid amount) will almost be cut, after the cut often falls to the "LPR calculation". From 400,000 to 10,000, or from 1 million to 50,000—the biggest drops are by a factor of dozens. The higher it is written, the more it seems like preparing a question to lower the court’s sentence.

5. A typical example of a second instance being demoted by two levels.

(2020) Shanghai 02 Minzong No. 9716: It is agreed that the man will pay the woman another cash compensation of 27 million yuan in 7 installments; Late payment of liquidated damages by 0.1 per day (annualized over 36%). The male party has only paid RMB 2.5 million, with RMB 24.5 million remaining unpaid as of the due date. The first instance (Yangpu Court) held that the compensation was not of an identity nature and should be adjusted by the contract law, with a discretionary annual interest rate of 13 per cent; the second instance (Shanghai Second Intermediate Court) held that 13 per cent was still too high, and that the case was a division of common property rather than a commercial loan, with the change of judgment based on overdue payments and calculated according to LPR. Conclusion: Even a daily interest rate of 0.1% will be reduced to the LPR; for those charging 0.1% or 0.5% per day, it’s essentially the same as handing in a note saying, “Please lower it.”

How to Write 2. to be Effective: List of Agreed Points

1. Responsibility to write "amount" or "algorithm", not just "liability for breach of contract"

Only writing "any party in breach of contract, bear the liability for breach of contract" is not written. In Case No. (2020) Hu 0113 Min Chu 6994 of the Baoshan District People’s Court, the agreement stipulated the division of real estate and the assumption of debts but did not provide for liability for breach of contract; accordingly, the court could only calculate liquidated damages based on the overdue sale proceeds, at the LPR rate, from the date the property ownership certificate was issued. Although they did receive the money, they lost the agreed-upon leverage. The terms must at least specify the “amount” and the “calculation method”: how many days of overdue, the base amount, and the applicable rate.

2. The overdue calculation should be "moderate" and not written in Gao Li.

The range acceptable to the court is roughly "one-year LPR" to "one or two times the LPR". Pragmatic writing: based on overdue payments, 1 to 1.5 times the one-year LPR on a daily basis, from the date of overdue to the date of actual payment. It serves as a deterrent without being deemed excessively disproportionate to the loss.

3. Installments, be sure to agree on "accelerated maturity"

For example, it is agreed that the man will pay a total of 1 million yuan in 5 installments, 200000 yuan in each installment, and pay it off within one year. It is also agreed that "if any one installment fails to pay in full on time, the remaining amount shall be deemed to be due immediately, and the woman has the right to demand a one-time payment of the remaining amount and claim liquidated damages". With this clause, if the other party fails to make a single payment, we can immediately demand full payment of all outstanding amounts. A real‑life case illustrates this: A compensation of RMB 1 million was to be paid in five installments. Due to a stringent clause stipulating that failure to make any installment on time would require immediate payment of the entire remaining balance plus liquidated damages, the man defaulted after making only the first installment. After the woman successfully sued and obtained a judgment, she recovered the remaining RMB 800,000 plus the agreed-upon liquidated damages through enforcement proceedings. Conversely, if the agreement merely states “payment in five installments” without providing for acceleration upon default, upon default, the claim typically can only be made with respect to the installment that has become due but remains unpaid.

4. Legal fees and other rights costs, write a separate sentence.

In Xuhui Court (2019) Shanghai 0104 Minchu No. 22361 case, the agreement stipulates that those who fail to perform their obligations on time shall pay liquidated damages of 300000 yuan and bear the reasonable expenses (including attorney's fees, litigation fees, etc.) for the other party's rights protection. The court finally awarded liquidated damages of 300000 yuan and legal fees of 90000 yuan. If the agreement does not provide otherwise, attorney’s fees are generally not awarded; don’t forget to include this clause.

5. "No adjustment" clause can be written as soon as possible, but don't be a talisman.

Pudong Court (2020) Shanghai 0115 Minchu No. 605 case, the agreement agreed to pay liquidated damages of "compensation nature, both parties shall not claim adjustment" on the basis of five ten thousandths of a day for overdue household relocation. The court supported the liquidated damages and legal fees. However, such clauses are limited in their binding force on the court and may still be reduced under article 585 if the amount is significantly excessive above the loss. It won’t hurt to write it down; what really matters is setting the amount at a reasonable level.

3. which conventions the court does not support

1. Package the compensation as "borrowing interest"-there is no real loan relationship, interest is not recognized.

This is the easiest pit to step on. There is a case in which the parties divorced in 2018, and their agreement stipulated that the house would belong to the husband, who was required to compensate the wife with RMB 3 million by May 2019. The man’s business failed, and he has not paid. Someone suggested that the man write an IOU: “I hereby borrow 3 million yuan from the woman as divorce settlement funds, with interest to be paid at a monthly rate of 1.5%.” In 2022, the female party filed a lawsuit, claiming a principal of RMB 3 million plus a monthly interest rate of 1.5% (with interest totaling over RMB 2 million over several years) based on the promissory note. The male party’s counsel responded in the defense: This case is a post-divorce property dispute, not a private loan. The parties did not have a genuine intent to enter into a loan agreement, and interest applies only to private loans. The divorce agreement is not subject to interest provisions, and any such provision is therefore invalid. The court adopted: the issuance of a debit note is only to confirm the fact that the amount due has not been paid, the two sides do not mean to borrow, coupled with the marriage is a combination of feelings, whether the interest support agreed by the debit note needs to be measured from the family, children's point of view, so it is not supported.

The lesson is straightforward: don't use "IOUs + interest" to package divorce compensation. If you want to punish late payment, the correct way is to write "late payment liquidated damages" directly in the agreement, which is currently supported by the court. From a legal perspective, this is also straightforward: Article 676 of the Civil Code addresses interest on overdue loan repayments, while Article 680 governs loan interest rates—both provisions apply only where there exists a genuine lending relationship. A divorce compensation payment is not a loan and therefore does not fall under the category of “interest”; as for liquidated damages, Article 5

85provides a general safeguard.

2. Liquidated damages are excessively higher than the actual loss.

Even if it is written as a default rather than interest, it may be lowered. The criterion for determination is the actual loss, with due regard to the performance of obligations, the degree of fault, and expected benefits, and assessed in accordance with the principles of fairness and good faith. When compensation payments are delayed, the non-breaching party’s actual loss primarily consists of the cost of capital tied up, typically around the level of the Loan Prime Rate (LPR); therefore, after judicial adjustment, the awarded amount generally settles at the LPR.

3. Punishment of heavy color, out of the actual loss of the abnormally high agreement.

Xi 'an Yanta District Court (2024) In the case of No. 33774 Minchu, Shan 0113, the man promised in writing to deduct points for vehicle violations within a time limit, and "compensation will be given at 10,000 yuan per point" for those who did not cancel the points within the time limit ". Because the points had not been cleared, the contractual penalty amounted to RMB 120,000 as agreed. The plaintiff deemed this amount unreasonable and only claimed RMB 10,000, which the court upheld. If you stubbornly insist on 120,000 yuan, you’ll probably end up getting haggled down. An excessively high agreed-upon amount will only increase the burden of proof and reasoning.

4. Delays caused by force majeure or the consent of the breaching party to the extension may not constitute a breach of contract.

Putuo Court (2020) Shanghai 0107 Minchu No. 4384 case: the two sides agreed that the property must be sold before February 29, 2020, the man should pay the woman 600000 yuan on the day of receipt of the down payment, breach of contract to pay liquidated damages of 300000 yuan. The man failed to make the payment on time, so the woman filed a lawsuit seeking a division of the property worth RMB 2.4 million, plus RMB 300,000 in liquidated damages. The court found that the male party’s delay was due to factors such as buying and selling a house, paying deed tax, obtaining a mortgage loan, and the pandemic. During this period, the parties communicated via text messages, and the agreed payment deadline accordingly changed; therefore, the agreed deadline has lost its binding effect, and no breach of contract can be established. The pandemic constitutes force majeure, and the defendant’s difficulty in making payment was caused by this force majeure event. As the obligation has since been fully performed and there was no subjective intent to breach the contract, the court ultimately dismissed the claim for RMB 2.4 million plus RMB 300,000 in liquidated damages. A reminder to the party adhering to the contract: If, when the other party is in default, you repeatedly agree verbally to “wait a little longer” without putting it in writing, you may risk having the court or arbitrator determine that the deadline has been modified and that no breach of contract has occurred.

5. For "fake divorce" that has completed divorce registration, the agreement is generally valid.

Xuhui Court (2018) Shanghai 0104 Minchu No. 16196 case, the agreement agreed that the man should compensate the woman for mental damage in one lump sum for divorce, 50000 yuan, and agreed that the liquidated damages payable for failure to fulfill the payment obligation within the agreed time limit, 100000 yuan. The court held that the agreement represented the true intentions of both parties and was binding upon them, and accordingly awarded the outstanding amount, 50,000 yuan in compensation for emotional distress, and 100,000 yuan in liquidated damages. The motive of "false divorce" usually does not affect the validity of the agreement, and the agreement may be shaken only when fraud and coercion can be proved.

4. the other party does not perform, how to step by step relief.

1. Before prosecution: written reminder, fixed evidence

Don't just rush on the phone. Send a WeChat message, text message, or EMS notice of demand, stating: “You were required to pay RMB X by X date but have yet to do so. Please make full payment within X days; otherwise, I will file a lawsuit and claim liquidated damages and interest.” Keep records of all communications. This step can establish the breach of contract, determine the starting point for liquidated damages or interest, and interrupt the statute of limitations. Disputes over the enforcement of a divorce agreement are subject to a three-year statute of limitations, which begins to run from the date when the party knew or should have known that its rights were infringed; in cases of installment performance, the limitation period shall be calculated separately for each installment.

2. Prosecution: final decision, jurisdiction

The cause of the case is mostly "post-divorce property dispute"; the "alimony dispute" involved in alimony; the agreement is characterized as an ordinary contract (such as a vehicle violation commitment) may be filed according to the "contract dispute"-the case of Sun and Zhang is a contract dispute. Jurisdiction is generally vested in the court of the defendant’s domicile or habitual residence; if the parties have agreed on a place of performance in their contract, the court at that place of performance may also have jurisdiction. The claims typically include: payment of the agreed sum, liquidated damages, overdue interest/loss of use of funds, attorney’s fees, and court costs. If the other party has signs of transferring property, it can apply for the seizure and freezing of its bank, WeChat, Alipay account, real estate and vehicle when filing a lawsuit.

Three True Judgments

(1) Shenyang Yuhong District Court (2022) Liao 0114 Min Chu No. 8670: The woman agreed to divorce in 2011, agreeing that the man should pay 10000 yuan before December 31, 2012, but the man did not pay. The court ordered payment of RMB 10,000, with interest calculated at the one-year Loan Prime Rate (LPR) on a principal of RMB 10,000, from December 31, 2012, until the date of actual payment. After ten years, as long as the agreement remains valid and the rights have not been waived, interest will still be awarded.

(2) Sichuan Suining Chuanshan District Court (2024) Sichuan 0903 Minchu No. 970: The agreement stipulates that the man shall pay the woman 120000 yuan before December 18, 2023, and the man argues that he "has not received alimony". The court held that child support payments do not constitute a valid reason for withholding the property division payment, and ordered the defendant to pay RMB 120,000. Furthermore, the court ruled that, with RMB 120,000 as the principal, interest for the use of funds shall be calculated at the one-year Loan Prime Rate (LPR) from December 19, 2023.

(3) Xi 'an Yanta District Court (2024) Shaanxi 0113 Minchu No. 33774: The undertaking stipulates that if the man fails to perform the overdue compensation of 10,000 yuan, he will be awarded liquidated damages of 10000 yuan (the plaintiff will reduce it at his discretion).

The three cases have in common: if the written promise in the agreement or divorce is valid, the court will support the principal; the interest/capital occupation loss is usually calculated according to LPR; liquidated damages depends on whether the agreement is reasonable.

4. Post Judgment: Application for Enforcement

If the judgment comes into force and the performance period expires, it still fails to perform, it can apply to the court of first instance or the court of the place where the property to be executed is located for enforcement; the limitation period of application for enforcement is two years, and the suspension and interruption provisions apply from the last day of the performance period stipulated in the legal documents. The means of enforcement include: online investigation and control, freezing and withholding of bank deposits and balances of WeChat and Alipay; Seizure and auction of real estate vehicles; Limit high consumption and include it in the list of dishonesty; Those who refuse to perform may be fined or detained, and if the circumstances are serious enough to constitute the crime of refusal to execute shall be investigated for criminal responsibility. Double the interest on debts during the delay in performance of the obligation to pay money. In the previous 1 million yuan compensation case, the man still refused to pay after losing the second trial. The woman applied for enforcement and finally received the remaining 800000 yuan compensation and liquidated damages.

5. Litigation Practice: Cause of Action, Evidence Presentation, and "Whether Claims Can Be Asserted Together"

1. Cause of Action and Basis of Claim

The most commonly used is "property disputes after divorce", and the claim is based on the divorce agreement, plus Article 509 of the Civil Code (full performance according to the contract), Article 577 (non-performance of contractual obligations should bear the responsibility of continuing performance, compensation for losses and other breach of contract), Article 584 (the amount of compensation for losses is limited to the losses caused by breach of contract). Where an agreement is treated as an ordinary contract, the general rules of contract writing apply.

2. List of Evidence

Original or record copy of divorce certificate and divorce agreement;
Evidence that the other party failed to perform on time (performance deadline clause, bank transfer records, and records of reminder communications);
Penalty/Interest Calculation Table (Principal, Commencement Date, Rate, Amount);
Evidence of actual loss (e. g. interest on borrowings to raise money, alternative transaction costs);
Clues regarding assets (real estate, vehicles, equity interests, bank accounts, WeChat/Alipay payment accounts);
If the attorney's fee is claimed, the agency contract and invoice shall be prepared.

The key elements of the evidence revolve around three matters: “agreement, non-performance, and loss.” If any one of these is missing, the corresponding claim may not be upheld.

3. Can liquidated damages and default interest be claimed simultaneously?

Yes, but there is a cap on the total amount, and it depends on the agreement. Baoshan Court (2020) Shanghai 0113 Minchu No. 2549 Case: The defendant failed to pay 250000 yuan within the time limit, and the plaintiff claimed both overdue interest and liquidated damages of 50000 yuan. The court supported both on the grounds that the total interest rate did not exceed the legal provisions. Pudong Court (2018) Shanghai 0115 Minchu No. 34878 case further shows that both liquidated damages and overdue interest are supported, but "liquidated damages are recalculated with interest without legal basis"-liquidated damages themselves no longer accrue interest, and the sum of the two items does not exceed the annual interest rate ceiling stipulated by law. In practice, four times the one-year LPR is used as the aggregate ceiling reference. If the agreement only provides for liquidated damages, generally only claims liquidated damages; if only interest is agreed or not agreed, the court usually supports the loss of capital appropriation calculated according to LPR (e. g., Li and Peng's case).

Class Case Reference: A property dispute after divorce heard by Ningbo Yinzhou Court confirmed that the property division clause in the divorce agreement is binding on both parties; the filing agreement does not contradict the separately signed Agreement and is a supplement to the former. The defendant shall pay economic compensation of 96000 yuan and liquidated damages according to the contract (the content of the breached metal property shall be subject to the Contract Law). Trial Court: Ningbo Yinzhou District People's Court Case No.:(2017) Zhejiang 02

12Minchu No. 10906

6. FAQ

The divorce agreement does not include liquidated damages. If the other party does not pay, can I claim interest?

can claim "loss of capital occupation", the standard is usually one-year LPR, and the starting point is generally the day after the expiration of the agreed performance period. In the case of Li and Peng, the agreement only agreed on the payment term, did not agree on the breach of contract and interest, the court still ordered to pay the loss of funds occupation according to LPR. However, if the agreement does not mention late liability, it advocates less space and cannot advocate high interest in the sense of borrowing.

The other party has been stalling. When should I file a lawsuit? Will the statute of limitations expire?

The sooner the better. The three-year statute of limitations applies, starting from the date on which the right was or should have been known to have been impaired, and starting separately for each instalment. In the middle of WeChat, SMS, and letter reminders, the time limit will be interrupted and the calculation will be restarted, but the evidence must be retained. The longer the delay, the greater the risk of the other party transferring property and proving difficulties, and it is recommended to prosecute and synchronize property preservation as soon as possible after the failure of the notice.

Is it effective for the other party to refuse payment on the grounds of “not receiving child support” or “having no money”?

Pretty much useless. In the case of Li and Peng, the defendant defended "not receiving alimony", and the court made it clear that alimony was not a reason for refusing to pay the division of property. "No money" does not affect the judgment, only the execution-the court will investigate and control the property under its name, the necessary time limit is high, breach of trust, fines, detention.

Practical experience of 7. lawyers

The liquidated damages in the divorce agreement does not necessarily mean that you will get the full amount. In practice, many people think that the liquidated damages written in black and white will be stable, in fact, the agreement is too high (such as one day overdue by 5‰) is likely to be significantly reduced, because the function of the liquidated damages is to make up for the loss rather than punish the other party. Therefore, at the signing stage, it is necessary to place the amount in a range that is roughly equivalent to the possible loss and is easily supported, rather than betting that the other party will not dare to default. At the same time to prevent the "interest" and "default" mixed write-no real loan relationship but agreed on "interest", often not recognized, it is better to directly write down the late payment of the default calculation method.

When the other party is already in arrears, don’t rush to get angry—first, make sure your foundational work is solid. The first step is to organize the agreement, transfer records and each reminder (SMS, WeChat, express mail) into a clear chain according to time to prove the fact of breach of contract and the starting point, and to distinguish which part is the property payment obligation and which part is the liquidated damages, which are calculated separately. Every supervision should retain evidence to avoid the other party's defense of "long overdue. If the agreement also provides for a mortgage, guarantee or conditional transfer, check whether these arrangements have been registered at the same time, and do not wait until the prosecution finds that the guarantee is in vain.

Judge the real reason of the procrastination of the other party before suing: whether the money is really tight, or whether you are gambling that you will not be serious. The former can be discussed in installments, but it should be stated in the agreement that once the supply is cut off, it will all expire and the liquidated damages will be retained. For the latter, it is necessary to file a case decisively and use the prosecution itself to break its fluke mentality. Please set forth all claims and requests in a single submission whenever possible. Include any compensation, liquidated damages, and assistance with transfer of title that can be asserted together in the complaint to avoid the time and costs associated with filing separate lawsuits. If the other party still fails to comply after the judgment takes effect, promptly apply for compulsory enforcement and closely monitor any leads regarding their assets to prevent them from transferring or concealing their property during the litigation.

The liquidated damages in the divorce agreement is not "earn if you write it", nor is it "useless if you write it". Whether it can be fulfilled depends on three factors: whether the agreement is specific, whether the amount falls within a reasonable range, and whether sufficient evidence is available when making the claim.

Suggestions to the parties in Ningbo: If the agreement has been signed and the other party has breached the contract, the fixed evidence should be urged in writing first, the lawsuit should be filed as soon as possible and the property preservation should be synchronized, and the principal, liquidated damages, loss of capital occupation and legal fees should be written down together; if the agreement is being signed or supplemented, the payment term, overdue calculation (1 to 1.5 times of LPR is recommended), accelerated due period and legal fees should be written clearly, change the abnormally high "a few thousandths of a day" into a reasonable range; Don't use "IOU + interest" to package the compensation, write the liquidated damages clause directly. Putting effort into the terms of the agreement during the signing stage is far better than engaging in repeated disputes in court afterward.