Fundamental Breach Of The System

The legal system of Substantial breach of contract has developed in an important world wide legal system since it came into being in Britain. In practice, the legal system plays a key role in regulating trade actions, protectint market orders and assuring trade security. This paper historically describes its coparation with contrct breach and exposes its nature and constituive requierments, legalization standards, legal consequence and its valie. And the whole paper consists six parts, totaled over 32,000 words.Part Ⅰ descibes its formation and development and its coparation with contract breach. Substantial breach of contract, as a legal system, originated in the Common laws. In the 19th century, the Britain court differentiated th contract terms as "condition" and "warranty". If a party to a contract violated the condition terms, which was regarded as substantial breach of contract, the other party woud consequently claim the rescission of a contract and do so, but only had the right to ask for compansation, if the warranty terms violated. With the difficulties to distinguish such two kind terms, the Britain court gradually practiced to affirm a substantial breach by the practical harms.Part Ⅱ descibes its basic theory. Substential breach of a contract reflects the wanton trample on the principle of contract abiding-by, which will destoy benefits from the contract, the bad deed that will endanger the market credit; what is worse is that that will endanger the trade security. The breach's essential charater embodies in the serious harmful consequence. And such breach is also the violation of the basic contract obligation and the harms of the contract right. Substantial breach of contract is not a new or particularcontract breachin quality but just one form of the various beaches. Contract breach is the definituion in Continetal law system and substantial breach of contract is that in Anglo-American law system. And the former aims to show the reliability of the contract debtor and the latter aims to find remedies for the creditor, This classification reflects the different thinking and their own value choice.Part Ⅲ descibes its constitutive requirements. The constitutive requirement for the substantial breach is the practical action of fundamentalbreach, which must have common breach character. In other words, the essential requirements the violation of the contract terms and its harmful consequence for the creditor and there is no need to require the subjective elements of the doer, which is the constitutive requirement of contract breach. That the two different contract breaches have their respective constitutive requirement has the reasons as follows: 1) Substantial breach of contract is a concrete deed which is objective and mustn't necessarily have the subjective element. 2) If subjective element required, it will limit substantial breach into a very small range. 3) The subjective fault is not always certain to legalize, which will not benefit the protection of trade security.And whether such breach has led to the irrealization of the other party's legal contract destination, direct or indirect, is its final measurement.Part Ⅳ describes its first legal consequence, that is also relations with the rescission of contract. The relations between substantial 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, and this practice can premote the trade and protect the trade order, and can still remedy the bebefit of the creditor when a contract substantially violated.Part Ⅳ descibes its second consequence. To search for the balance between the freedom of contract doctrine and the inhibition of escape clauses abusing, many modern countries have laid down strict restrainments for the obligation exemption of the party that substantially violates the contract terms, which is always operated as follows: If substantial breach made, the violated clauses should be interpreted llimitedly, and the exe...