Such an agreement is not illegal, as long as both parties agree and sign or seal for confirmation. The main provisions of the contract law on the issue of liquidated damages, if the parties to the contract have not agreed on liquidated damages in the contract, the liquidated damages are equal to the actual economic losses caused by the breach of contract.

How to compensate the other party for breach of contract:

1, according to whether the parties agree on liquidated damages, it can be divided into agreed compensation and legal compensation.

Agreed compensation includes two situations: the parties agree on compensation clauses in the contract, and the other is that the contract is not agreed, but a compensation agreement is reached after the contract is established;

2. Agreed compensation

When concluding a contract, the parties to the contract agree in advance on the calculation method of compensation arising from one party's breach of contract or pay a certain amount of money to the other party. Because it is difficult to determine the scope of loss when concluding a contract, the parties can only agree on the calculation method of compensation in the contract, but not the fixed amount of compensation. Compensation can be determined in monetary or non-monetary ways;

3. Statutory compensation

It means that when one party breaches the contract and causes losses to the other party, the compensation amount is calculated according to the method stipulated by law.

To sum up, after the contract comes into effect, both parties can agree on the specific calculation method of liquidated damages through supplementary agreement or when signing the contract, so if one party fails to perform its obligations, the other party can terminate the contract or demand to bear the liability for breach of contract. If one party fails to perform its contractual obligations or fails to perform its contractual obligations in conformity with the agreement, thus causing losses to the other party, the amount of damages shall be equivalent to the losses caused by the breach of contract, including the benefits that can be obtained after the performance of the contract; However, it shall not exceed the losses that the breaching party foresaw or should have foreseen when concluding the contract.

Legal basis:

Article 22 of People's Republic of China (PRC) Labor Contract Law

During the service period, if the employer provides special training fees and professional technical training for the workers, it may conclude an agreement with the workers to stipulate the service period.

If the laborer violates the service period agreement, he shall pay liquidated damages to the employer in accordance with the agreement. The amount of liquidated damages shall not exceed the training expenses provided by the employer. The liquidated damages that the employer requires the workers to pay shall not exceed the training expenses that should be shared for the unfinished part of the service period.

If the employer and the employee agree on the service period, it will not affect the employee's improvement of labor remuneration in accordance with the normal wage adjustment mechanism during the service period.