Where one of the situa ons speci ed in the preceding paragraph exists so that the purpose of the contract cannot be achieved, the people’s court or an arbitra on ins tu on may terminate the contractual rela onship of rights and obliga ons upon request by a party, but the default liability shall s ll be borne without being a ected. Ar cle 581 Where a party fails to perform his obliga on or his performance does not conform to the agreement, if the obliga on shall not be enforced by virtue of the nature of the obliga on, the other party may request such party to bear the expenses of a subs tute performance by a third person. Ar cle 582 Where the performance does not conform to the agreement, default liability shall be borne in accordance with the contract between the par es. Where the default liability is not s pulated or is not clearly s pulated in the contract, and if it cannot be determined according to the provisions of Ar cle 510 of this Code, the aggrieved party may, by virtue of the nature of the object and according to the degree of the loss, reasonably request the other party to bear the default liability such as repair, redoing, replacement, return of the object, decrease in price or remunera on, and the like. Ar cle 583 Where a party fails to perform his contractual obliga on or his performance does not conform to the agreement, he shall make compensa on if, a er he has performed his obliga on or has taken remedial measures, the other party s ll su ers loss. Ar cle 584 Where a party fails to perform his contractual obliga on or his performance does not conform to the agreement so that the other party su ers loss, the amount of compensa on shall be equivalent to the loss caused by the breach of contract, including the bene ts expected to be obtained should the contract had been performed, except that it shall not exceed the loss that may be caused by the breach that the breaching party forsees or should have forseen at the me of conclusion of the contract. Ar cle 585 The par es may agree that, upon default by a party, a certain amount of liquidated damages shall be paid to the other party according to the circumstance of the breach, or the par es may agree on the method of calcula ng the compensa on for losses arising from the breach. Where the agreed liquidated damages are lower than the loss caused, the people's court or an arbitra on ins tu on may increase the amount upon request of a party. Where the agreed liquidated damages are excessively higher than the loss caused, the people's court or an arbitra on ins tu on may make appropriate reduc on upon request of a party. Where the par es agree on the liquidated damages for delayed performance, the breaching party shall con nue to perform the obliga on a er paying the liquidated damages. Ar cle 586 The par es may agree that one party deposits earnest money to the other party to secure his claim. An earnest money deposit contract becomes e ec ve upon actual delivery of the earnest money. The amount of the earnest money shall be agreed by the par es, except that it shall not exceed 20% of the value of the object of the principal contract, and any excessive part does not have the e ect as earnest money. Where the amount of the earnest money actually delivered is more or less than the agreed amount, the agreed amount of the earnest money shall be deemed to have been changed. Ar cle 587 A er a debtor has performed his obliga on, the earnest money shall be calculated as part of the price or be refunded. Where a party paying the earnest money fails to perform his obliga on or fails to perform it in conformity with the agreement, so that the purpose of the contract cannot be achieved, he is not en tled to request refund of the earnest money. Where a party receiving the earnest money fails to perform his obliga on or fails to perform it in conformity with the agreement, so that the purpose of the contract cannot be achieved, he shall refund twice the amount of the earnest money to the other party. Ar cle 588 Where the par es agree on both liquidated damages and earnest money, when a party defaults, the other party may choose to apply either the clause on the liquidated damages or the clause on the earnest money. ti ti ti ti ff ti ti ti ti ti ti ti ti ti ti ti ti ti fi ti ti ti ff ti ti ti ti ft ti ti ff ti ft fi ff ti ti ti ti ti ti ti ti ti ti ti ff ti ft ti ti ti ti ti ti ti ti ti ti ti ti ti ti 65