Recognition Of The Anticipatory Breach System And The Status Of Breach System In Our Country

Recognition of the Anticipatory Breach System and the Status of Breach System in our CountryThe anticipatory breach system, one important institution in the field of contract law, was introduced into China in the year 1999 in "Contract Law of People's Republic of China", which really provides legal basis for the system to perform in our country its special function of settling contract disputes quickly and reducing waste of resources. However, anticipatory breach system is after all a legal system of Anglo-American law, so it requires us to put clearly its theoretical basis and find the legal system applicable to it so that it can perform its function smoothly in our country's legal basis of civil law.Because of the former reason, the author first of all analyzes the legal basis of anticipatory breach system in China's legal environment and introduced the concept and nature of the system. The author indicates that the so-called anticipatory breach system is a kind of legal system dealing with the affairs that the debtor, due to his own reason, expresses to the creditor his refusal or incapability to fulfill the contract, either verbally, literally or by action, before the expiry of the term of fulfillment. The creditor may nullify the contract and require redemption of his loss. Or he may give up his right to release the contract and wait for the term of fulfillment. The author holds that anticipatory breach is a kind of breach which has actually happened. It's not a presumed breach. Hence, as to the name of anticipatory breach system, the author points out that it should avoid the confused name of "presumed breach" and take the name of "anticipatory breach" or "pre-breach" instead.Based on this, the author holds that it requires four conditions to form an anticipatory breach. First, there's a legally reached valid contract. Second, the term of fulfillment of the obligation has not expired. Third, the debtor refuses to or incapable of fulfill the contract and last, there is no disclaim. The author analyzes the concrete content of each condition and the element in each condition that may have effect on the form of anticipatory breach. Also, the author refers to several cases to elaborate the form of anticipatory breach system and its flexibility in application.Since our country follows Civil Law, to introduce a legal system of Anglo-American law, we have to find its combining joint with the Civil Law. As to anticipatory breach system, it must adapt to our nation's system of breach to get a smooth exertion. The substantive element of anticipatory breach system is debtors' expression of his refusal or incapability to fulfill the contract before the expiry of the term of fulfillment, while refusal or incapability to fulfill contract is exactly the way that the system of breach theory in Civil Law distinguishes breach. With this sharing point, anticipatory breach system may find its suitable standing in our country's system of breach theory.Considering the legal consequence of anticipatory breach, the author holds that the creditor may choose either to accept it or not, which may leads to different legal consequences. According to the basic theory of anticipatory breach system and our country's statute, if the creditor choose to accept the anticipatory breach, he may perform his right to release the contract, claim contractual compensation against the debtor and meanwhile, he should take the obligation to reduce loss to minimum degree. If he chooses not to accept anticipatory breach, then the effect of the contract preserves. And the creditor has the right to sue in the court to compel the debtor to fulfill the contract or to require the debtor to undertake the legal consequence of default fine or earnest according to the contract clauses.Lastly, because of the establishment of anticipatory breach system in our country, the traditional breach system of Civil Law in our country has reformed. Seeing that it prevails among the learned to distinct breach as pre-breach and a...