A Study On Issues Of Terminating Contract

The dissertation cites three most contentious issues in effect of contract termination. They are retroactive effect of contract termination, liability in restitution and compensation for damages. In the discussion the dissertation adopts the method of comparative law, the method of benefit-based analysis and the method of positivism. The dissertation that has 3,2000 words could be divided in three parts.The first part discusses the issue of retroactive effect of contract termination. Through reviewing legislation in each country and analyzing relative theory, the dissertation argues that the viewpoint that contract termination would eliminate retroactive effect of contract relationship doesn't accord with the practice of legislation, while neither can the view satisfy the need of practice nor justify itself in theory. The dissertation holds that contract termination has not any retroactive effects. The exercise of the right to terminate contract only terminates parties' so-called "primary obligations". Consequently, although each party's obligation is terminated, the contract relationship isn't terminated. As the maintenance and transformation of primary obligations in contract, compensation for damages for breach of contract can't be diminished due to the termination of obligation. The issue of retroactive effect is only applied to deal with the restitution obligation that means the parties' performance before the termination of contract. In this way, contract termination is theoretically supposed to have retroactive effects, thus supporting restitution. However, the viewpoint leads to a lot of puzzles. There are many other alternatives than only retroactive effect to deal with the liability. Restitution is the important content of restitution liability, which is formed due to the exercise of the right to terminate based on party's indication after termination of contract.In the second part, liability in restitution after termination of contract is discussed. Restitution means that both parties come back to the original situation before contract. The dissertation holds that restitution makes difference from the definition of comeback to original situation as. The exact meaning of restitution after termination of contract should be that both parties in contract should return to debter before termination. Thus the term should not include compensation for damages because of termination of contract, restitution is set for both parties. Restitution based on the existence of realwould have effects on real right, restitution per se include both real and value. When if it is impossible to return real, reimbursing should be regard as general regulation, reimbursing does not equal to compensation for damages.The third part discusses the relationship between termination of contract and compensation for damages. After termination of contract, the establishment of compensation of termination should be separately dealt with. Compensation for damages could exist before the termination of contract while it also can happen during termination. Compensation for damages before termination has not only the compensation for inherent interest but also the compensation for performance interest In other words, termination of contract could cause compensation, and failure to performance does so as well. Compensation for damages for breach of contract should not be influenced by termination of contract. Compensation for damages for breach of contract is different from termination of contract to deal with different of issues. Both of them can coexist. Under the circumstance of compensation for damages for breach of contract, compensation could adopt the general regulation for damages for breach of contract. The compensation during termination is compensation for reliance interest and the nature of it is compensation for damages for tort. Due to the premise that compensation for damages for breach of contract is permitted, then the compensation for negligence of contract can't be claimed by the party who claims for termination.