Study On The Legal Rescission

Rescission of contact is a system that helps the parties involved get rid of the binding of contracts by a legal or conventional way, and arranges interest relations of the two parties concerned afterwards. In the system of rescission, the legal relief right is a right with which the parties concerned can terminate their contractual relationship according to their intentions when the conditions for legal rescission are met. Because of its legal nature, legal rescission gets the behaviors of and the relations between the two parties during this process totally under the charge of the rescission system, therefore, its actual effects depend on judicators' interpretation of laws, which is most likely to evoke ambiguity. This point can be verified by so many problems about legal rescission arising in judging practice and academic seminars. Based on existing research data, the paper will expound on some problems that I am interested in and that I have attained a fair knowledge of, including validation of special agreement preventing legal rescission, the relationship of the aspect in legal rescission and contract termination, duration of legal rescission and limitation of actions, and validation of legal rescission. The last is particularly important and is the focus of my paper.The first part has talked about special agreements preventing legal rescission. First, the paper indicates under the circumstance that Contract Law has not a complete regulation to eliminate legal relief rights, it is reasonable and in accordance with principle of good faith for the parties concerned to use special agreements on the purpose of preventing the contract from being rescinded on those occasions when the above Contract Law have no relevant regulations though, foreign legislations have stipulations to forbid legal rescission. So there is no reason to prohibit such special agreements. Second, regulations about legal rescission in Contract Law, in nature, are peremptory norms with limited rights rather than peremptory norms verifying behaviors. Their aim is to supply guarantee and support to private autonomy, and offer a game rule for it. If the parties concerned are willing to abandon this rule and make a new rule by themselves, it is also a part of private law autonomy. In this sense, making a special agreement preventing legal rescission is all right, as long as the special agreement itself doesn't have not invalid subjects (Acts 52,53 and 40 in Contract Law)The second part is about the relationship between legal rescission and contracts termination.Nowadays, the differences between'rescission'and'termination'are hard to say in the civil law system. The conceptual confusion is the main reason for internal disorder of the contract law system. In my opinion, we should emulate the legislations of civil law countries, re-distinguishing'rescission' from'termination', bringing termination or arbitrary termination of continuity contracts that will be legally effective in future into the system of contract closing, and put the system parallel to legal rescission.The third part is about the duration of legal rescission. The exercise of our rights should be limited in time. In general, rights of formation should be limited in scheduled period, while rights of claim can only be exercised within the limitation of actions. Although some scholars has doubted this point, I still believe it is of realistic significance to specify scheduled period as the duration of the rights of formation, because limitation of actions cannot limit the rights of formation. Thus, the deadline of legal rescission is the scheduled period, from the exercise of legal rescission. In our current civil law system, there is no related regulation for scheduled period, the future contract law should make specific stipulations about the length of scheduled period.The fourth part has talked about legal rescission of non-effect contracts. Those contracts that have been signed on though, are still legally ineffective, such as contracts with entry-into-force conditions or with time limits for start. In case a party's behavior has apparently hindered the realization of contract purposes, sticking to the contract and waiting for its taking effect will bring the other party great loss. In this case, the other party should be supported to rescission the contract or not? The paper holds that it is necessary to use legal rescission for non-effect contracts. There are two reasons. First, non-effect contracts have legal binding power, without which there is no need to talk about rescission, because rescission means to relieve the parties concerned of the binding power of the contract, and rescission can only be done to contracts with legal binding power. A non-effect contract is not equal to an ineffective contract, but is a contract with incomplete effects, in which the parties concerned still have the duty to do preparation work under the precondition that the obligation, controlled by the parties, relevant to the payment purposes has not taken effect. Second, as the parties concerned, rescission has legal benefits, such as breaking deadlocks between the two parties, and preventing the injured party from taking the responsibility of breach of contract and negligence in contracting. All these can help increase the degree of impartiality.The fifth part is about the validation problem of legal rescission. There are two kinds of problems about the legal validation of legal rescission. One is the status of obligations and rights between the two parties after the contract is rescinded. The other is whether legal rescission has retrospective effective. The explanation of the first problem should include the answer to another, as they are closely related to each other. Based on comparative analysis of the two main theories in the field in the country, the paper criticizes the eclecticism, and holds that the direct effect theory can be the theoretical foundation of solving the validation problem of legal rescission, that is, rescission is the reason not only for relieving the duty of undone payment, but also for ending the whole contractual relationship. After legal rescission of the contract, undone duties don't need to be performed and part of the already-done can be remedied with the return appealing right because they are not legally effective. The two problems that the obligation of restoration can be applied to the defense right of simultaneous performance and that the guarantee for original liabilities is prior to the obligation of restoration can find reasonable explanations in the direct effect theory.The sixth part is about the relations between change of circumstances and force majeure, both of which are all prerequisites of legal rescission. The paper indicates, before being categorized by laws, the incidents belong to change of circumstances and those belong to force majeure are not complementary in relations. Although some incidents cannot become force majeure in call cases, as a general rule, the application domain of change of circumstances is larger than that of force majeure, that is, the incidents that belong to force majeure should also meet the conditions of change of circumstances. As for which principle should be applied in this case, it can only be decided on which principle's constitutive requirements can the different results of the same incident with different legal requirements meet. Act 26 in Interpretation II of Contract Law has stressed the'circumstance'in change of circumstances is limited by 'non-force majeure', hereto I cannot agree with, because the research lab's in the Supreme Court illustration of the differences between two incidents with the distinctions between the two norms is a circular definition of verifying causes with their consequences, so it has no explanative power for why change of circumstances belongs to non-force majeure (Act 26 in Interpretationâ…¡of Contract Law).