RESEARCH OF THE BEST TIMING FOR GOVERNMENT'S TERMINATION OF FREEWAY REPAIR WORK CONTRACT

Normally, monetary penalties for breach of agreement will be stipulated in the contract. The contractor parties, who fail to fulfill the agreement, are required to pay the other parties a certain amount or proportion of money as a fine. However, it is worth our study - whether or not the scope of monetary penalty implementation and bases for determination of a fine will cover the losses of social and administrative costs incurred by the interruption of the contract. This research is about the best timing for government to cancel the freeway repair work contracts. Under the goal of the maximum social welfare, the limitation of government spending for the social and administrative costs invoked by interruption of contracts will have to be considered to attain the best timing of contracts' suspension or deferment. According to the factors of social and administrative costs, the best time point is calculated to reduce the loss of the aforesaid costs, which can also be used as theoretical basis for the future road-widening construction at home.