On Anticipatory Breach Of Contract

A breach always gives rise to the cause of action for damages, so providing breach remedies to the victim is the fundamental purpose of contract law. The doctrine of anticipatory breach of contract originated from the Common law system to solve the risk of breaching a contract before the time for performance comes. Anticipatory repudiation and prospective inability to perform constitute the two basic patterns of anticipatory breach. Anticipatory repudiation is a situation wherein one party clearly indicates to the other party prior to the time of his performance, that he will not perform the contract, and then the other party has the right to sue immediately for relief of breach. While the prospective inability to perform occurs in a situation that one party has reasonable grounds for insecurity regarding the other's performance, he may demand an adequate assurance of due performance.There is no concept of anticipatory breach in the Civil law system, but the defense for insecurity is stipulated in order to implement the principle of good faith. And the Civil law system has the concept of anticipatory repudiation as well. There are many similarities between this system and that of anticipatory breach. Both defense for insecurity and prospective inability to perform allow one party to get relief such as an adequate assurance to secure the party from losing the corresponding performance of the other party, when the other party has the possibility of non-performance. As to anticipatory repudiation, the essence of stipulations in the Civil law system and that of the common law system is consistent, although the applicable scopes are different. Therefore, the relevant rules in two big legal systems actually perform the same function.Most of Chinese legal scholars believe that Article 94(2) and Article 108 in the P.R.C Contract Law have manifested the thought of Anticipatory Breach, while the Article 68 and Article 69 are regulations of the defense for insecurity which have been changed to a necessary extent. However, the P.R.C Contract Law does not coordinate the relationship of these terms with many conflicts and overlapping conditions exist. 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 puts forwards a viewpoint that anticipatory breach system in the Common law system and the aforesaid regulations in the Civil law system can settle the problem of breach a contract before the time for performance comes in their inherent frame, because the doctrine of the anticipatory breach owns the same objective to the relevant regulations in the Civil law system. So it is not the most important thing to charge which legal system the relevant provisions of P.R.C Contract Law should belong to.There are six parts except for the introduction part in this thesis. The introduction mainly presents the background of the birth of the anticipatory breach system and relative regulations in the Civil Law system. From the first part to the fourth part, the author introduces the whole content of anticipatory breach system, which includes the summary, component, and remedies in two different situations. The fifth part is one of the high lights: the author concludes that the two big legal systems settle the problem of breach a contract before the time for performance comes in their inherent frame by comparing the system of anticipatory breach with the relevant regulations in the Civil Law system. The six part analyses the relative legislation in P.R.C Contract Law, and final get the conclusion.