On The Scope Of Damages Of The Rescission Of A Contract

The system of rescission of contracts is significant in modern contract law. Although our current Contract Law has some regulations on this system, there are too vague to be applied. Especially the scope of damages is unclearly, the judicial decisions always lead to different. These situations not just affect the interests of the parties, but also seriously undermine the authority and universality of the law. Basic objective of this thesis is to figure out the scope of damages of rescission of a contract, by comparing the legislation, cases of some countries, areas and that of the international Pacts, analyzing the disadvantages of our rescission system. Mean while try to find out whether the rescission of a contract has retroactive effect, the base of the right to allege the damages after contract is rescinded, and the requirements of the damages. Hope this can helpful for the complement of the system of rescission of contract, and provide a way for the judicial practice.Besides lead-in, the thesis contains four parts, about 33 thousands words.Part one is the rescission of contract and damages. There are two kinds of theories on whether rescission of a contract and damages can exist at the same time—The Creed of Selection and The Creed of Co-exist. Although The Creed of Selection satisfies the logical lean on the definition law doctrine, it sacrifices justice of law. Since the theory came in to being, it receives many complaining and criticizing, and was called "The trap of rescission". The Creed of Co-exist points out that the damage is objective truth, and can not be deprived when the contract was rescinded. In order to protect the rights, to reach the system's objective, and to agree with the legislation, we should adopt The Creed of Co-exist.Part two is the base of the right to allege the damages of the rescission of a contract. Before discuss the base of the right to allege the damages of the rescission of a contract, we need to know that whether the rescission of a contract has retroactive effect. The author insists that the rescission of a contract should not have retroactive effect. Considering to protect the rights and to accord with the truth, the base of the right to allege the damages of the rescission of a contract should be compensatory damages. Part three is the elements of the damages of rescission. The rescission of contract not always lead to damages, if you want to allege the damages, some more conditions are need, like the facts of the rescission, the damage of the rescission, and the relation between these two. When these conditions are reached, damages can be requited.Part four is the scope of the damages about the rescission of a contract. This part is the main content of this thesis. Firstly, it analyses the composition of contract interest of both Civil Law and Common Law Countries. Although the composition of contract interest is not all the same in these countries, the final object is just the same. They all try to defend the observant party's interest, make the result like the contract has been carried out. So the damages about the rescission of a contract should include two parts, incurred loss and available profit. From another perspective, any kinds of damages should not without limited, or it will become unfair. In our current contract law, the scope of damages of the rescission of a contract is limited by these principles, like the foreseeable principle, the principle of mitigation of damages, and the gains offset the losses principle. Only in this way, the system of the rescission of contract can achieve the genuine objective, not only meet the appeal of the observant party, but also not distribute more duty to the delinquent party.