Study On Rescission Of Contract And Compensation For Damages

The system of contract rescission arises in the process of the contract concept's evolution from contract freedom to contract justice, both the system of contract rescission and the system of compensation for damages are embodiments of contract justice. And there are always disputes on the relationship between contract rescission and compensation for damages in theory. There is a contradiction that according to traditional civil law, the object of contract rescission is the contract itself, and the legislations in most countries stipulate that contract rescission has full or partial retroactivity effect, while, they don't exclude the party to allege the compensation for the damages of the breach of contract, which bases on the exist of the contract. The former civil code of Germany leans to the value of the legal logicality, adopts The Creed of Selection which becomes relic at last because it can't balance the benefits of parties. However, the debate on the relationship between contract rescission and compensation for damages doesn't clam down. Based on the embedded comprehension about the aim of contract rescission system and comparative analysis of different legislations around the world, this dissertation reacquaints the object of contract rescission and concludes that contract rescission and compensation for damages can exist at the same time. The object of contract rescission is the original right and obligation in the contract, the contract itself and the right and obligation in the contract for the purpose of remedy are still exist, and it is the theoretic base of the party applies for the compensation for the damages of the breach of contract. And then, it discusses on the range of the compensation for damages after contract is rescinded. This dissertation tries to make the relationship of contract rescission and compensation for damages clearer. Besides lead-in and conclusion, the dissertation contains four chapters. Chapter One discusses contract rescission,compensation for damages and the evolution of the contract concept. Chapter Two focuses on the co-exist of the contract rescission and compensation for damages. Chapter Three analyzes the base of the right to allege compensation for the damages after contract is rescinded. Chapter Four is about the range of the compensation for damages after contract is rescinded. Chapter One first expatiates the main clue of the evolution of contract law is the development from contract freedom to contract justice, then it puts forward that both the systems of contract rescission and compensation for damages are embodiments of contract justice. Chapter Two first introduces the theoretic base and development of two kinds of theories on whether contract rescission and compensation for damages can exist at the same time—The Creed of Selection and The Creed of Co-exist. After the discussion above, the dissertation analyzes these two theories and alleges although The Creed of Selection satisfies the logical lean of the definition law doctrine, it sacrifices justice of law, and provides the reasons that The Creed of Co-exist is reasonable. Chapter three is the main content of this dissertation. Firstly, it analyses the object of contract rescission from several angels, concludes that the object of contract rescission should be the original right and obligation in the contract, the contract itself and the right and obligation in the contract for the purpose of remedy is not rescinded. So the problem that whether contract rescission has retroactivity effect becomes the problem that whether contract rescission makes the original right and obligation in the contractvanishes retroactively. After introducing the problem and theories of the retroactivity effect of contract rescission, the second part of this chapter puts forward that the original right and obligation should vanish retroactively after the contract is rescinded. In the third part of this chapter, after introducing the theories and reasons about the base of the right to allege the compensation for damages, it concludes that both theories have limitation on logic or justice, the theory and legislation just have choice on the lean to value of logic or justice. The author supports that the base of the right to allege the compensation for damages is breach of contract, and because of reacquainting of the object of contract rescission, this theory resolves the logical contradiction of traditional theory, gives attention to the values of the logicality and justice of law. In the last chapter, after introducing the general theory of the compensation for damages of breach of contract and theories of the range of the compensation for damages after contract is rescinded, the author alleges that the range should include two parts: compensation for damages of breach of contract and compensation because of contract rescission.