Legal basis: Article 570th of the Civil Code of People's Republic of China (PRC). If one party fails to perform its contractual obligations or fails to meet the contract obligations, it shall bear the liabilities for breach of contract such as continuing to perform, taking remedial measures or compensating for losses. Liquidated damages are punitive, not based on the premise that the non-breaching party suffers losses. Therefore, the agreement on overdue payment of rent penalty in the house lease contract is in line with the law.