Studies On Anticipatory Breach And Unsafe Right Of Defense

A synallagmatic contract is constituted on the basis of exchange of mutual performance that is the nature of the synallagmatic obligations. The fulfillment of performance depends on the intent and the ability of performance of the parties. Starting from the time the contract is made to the time due for its performance, it varies in the conditions of the property, intent and other factors relevant on performance. If one party's intent changes or the ability of performance decreases sharply before the time due for performance, the other party cannot get the corresponding performance for him. To carry out the principles of good faith and fair dealing, various countries have created different rules to prevent the possible risks in the interim of, two main rules of which are anticipatory breach and unsafe right of defense. Anticipatory breach derives from precedents in England. As an independent rule of breach, it constitutes the whole breach system of Anglo-American law system with actual breach. Anticipatory repudiation and prospective inability to perform constitute the two basic patterns of anticipatory breach. A breach may occur between the time the contract is made and the time due for its performance---that is, one of the parties breaches before either party has begun performance under the contract. When an anticipatory repudiation occurs, the other party has a choice between two alternatives: he may accept the repudiation and sue immediately for relief of breach; or he may ignore the repudiation and just continue performing under the contract. If a party has reasonable grounds for insecurity regarding the other's performance, he may demand an adequate assurance of due performance. Until that assurance is received, the party requesting it may, if commercially reasonable, suspend any of his own performance for which he has not already received the agreed return. Where the assurance is not provided within a reasonable time, it results in anticipatory breach. Anticipatory breach may promote the creditor to take measures as early as possible so as to reduce the loss actively. Unsafe right of defense originates from the civil law system. It allows the party required to perform first to suspend his performance when the other party is in bad property conditions and has the possibility of non-performance. It can secure the party required to from losing the corresponding performance of the other party, also stimulate the other party to perform and balance the interests of parties of contracts. Anticipatory breach and unsafe right of belong to two different law systems and have different legal culture background. It's unnecessary to compare two of them. But the Contract Law of PRC stipulates these two rules simultaneously. Article 68 of Chapter 4 "Performance of Contracts "is about unsafe right of defense, and Article 108 of Chapter 7 "Liabilities for Breach of Contracts"is regarded as rule of anticipatory breach. The arguments arise, as to how to deal with relationship of these two rules, whether these two rules can exist in the PRC law system, etc. The author compares them from their background, nature, scope and function. Though the two rules are remedies of the contract in a broad sense, they're still of different legal nature. Anticipatory breach belongs to the scope of breach; while unsafe right of defense belongs to the right of defense safeguarding the performance of contract. Different natures mean that they can survive together. But the Contract Law does not coordinate the relationship of them, and they do not exist in harmony. There are some questions in the law system, such as the stipulation of anticipatory breach is too simple, the scope of two rules overlaps, and the law is not consistent. These questions cause the confusion in the application. Therefore, the author brings forward series of corresponding suggestions on how to perfect the rules of anticipatory breach and unsafe right of defense in our country.