Study On The Legal System Of Fundamental Breach

The legal system of fundamental breach of contract, deriving from the English common law, has developed into an important world wide legal system. In practice, the legal system plays a key role in regulating trade actions, protecting market orders and assuring trade security. This paper summarizes the concept of fundamental breach of contract and discusses its constitutive requirements further by adopting the method of comparative research; and to comprehend and apply the legal system offundamental breach of contract better, this paper discusses the determinant criterion of fundamental breach of contract in the concrete forms of breaches, and then discusses the legal consequence of fundamental breach of contract. At last, in connection with the development of fundamental breach of contract in China contract law, this paper analyzes the demerit of fundamental breach of contract under Contract Law of China and affords the correlative suggestion. Except foreword and conclusion, the paper consists five parts.Chapter one describes the formation and development and comparsion with contract breach of fundamental breach of contract. Fundamental breach of contract as a legal system, originated in the Common laws. In the 19th century, the Britain court differentiated contract terms as"condition"and"warranty". With the difficulties to distinguish such two kind terms, the Britain court gradually invented"intermediate term"and in the end, practiced to affirm a substantial breach by the practical harms. The legal system of fundamental breach of contract has been adopted by many countries, including the United States of America, Germany, France, and it is also admitted into The U.N. convention on contracts for the International Sale of Goods(CISG), Principals of International Commercial Contracts(PICC), Principals of European Contract Law(PECL).Chapter two describes the constitutive requirements of fundamental breach of contract. Fundamental breach of contract is one kind of contract breach, so it must have common breach character. The special constitutive requirement of fundamental breach of contract is that the result from such breach is so severe that it has led to the irrealization of the other party's legal contract destination. The subjective element is not one of the constitutive requirements of fundamental breach of contract.Chapter three is on the determing fundamental breach of contract in the concrete forms of breaches. This part mainly discusses it from the angle of anticipatory breach, impossibility of performance, withholding performance, delaying performance and flaw performance.Chapter four describes the legal consequence of fundamental breach of contract. The relations between fundamental breach of contract and rescission embody in two respects: the former is the cause of the latter and the latter is based on and the result of the former. If there are exemptions in the contract, legal consequence of fundamental breach of contract is strict restriction for the obligation exemption of the party that substantially violates the contract terms. In addition, fundamental breach of contract affects the transfer of risk.Chapter five analyzes fundamental breach of contract under Contract Law of China. The Contract Law of China does use the concept of fundamental breach of contract, but as a matter of fact it adopts the legal system of fundamental breach of contract. The author contacts the contract law theory and practice in China, makes a brief comment on the legal system of fundamental breach of contract of China.