Some aspects of the liquidated damages clause in Chilean law

Abstract

The current status of the liquidated damages clause in Chile is developed. The sources that influenced the consecration of this institution in the Chilean Civil code, Spanish law and French law during the codifying period of the 19th century are also analyzed. The liquidated damages clause is characterized as an accessory convention, conditional and predetermined and conventional estimation of the damages by the parties. It is a clause that is considered classifiable in compensatory and moratorium, with a possible third option of classification, in case the parties agree for it to be a penalty clause. The paper also exposes the possibility of accumulation of compliance with the obligation and the penalty as compensation, as well as the possibility of accumulating a moratorium penalty and a compensatory penalty. The requirements demanded for the execution of a liquidated damages clause are presented and analyzed: being a conventional and predetermined estimation of the damages, the constituent elements of contractual responsibility must be fulfilled. Therefore, there must be a breach of contract, inexcusable imputability, constitution in default, damage and causation. It is emphasized that for the constitution in default, in compliance with a liquidated damages clause, judicial interpellation is necessary, that is, the valid notification of the claim. Finally, the rules on the burden of proof and the need to prove each of the elements of contractual responsibility in this institution are developed.