Research On The Relationship Between Contract Termination And Risk-bearing

The termination of contract and risk-bearing are the treatments to the performobstacle which not attributable to the parties in law of contract. Termination ofcontract is to make the parties liberate from the constraints of the contract which cannot achieve the purpose. In order to get the reasonable allocation of loss damage ofthe subject matter between the parties, civil law countries usually provides morespecific rules of the risk-bearing. According to that, can people find whether thedebtor need to continue to fulfill the debt and requests to treat payments. In this way,the scope of both system must be overlapping. In recent years, some scholars in civillaw countries advocated that the termination of the contract should absorb therisk-bearing so as to make the law a more clear system.Risk-bearing is set in the contract for the sale which is representative in China,while the termination of contract is determined in the General Principles of ContractLaw. Thus the both are inevitably staggered. Domestic scholars has discussed aboutthis cross, but few analysis deeply on the relationship between the both rules.The orientation of the contract termination is to make the interests between theparties restore to the state before the contract is concluded. Of course, that does notrule out seeking compensation for losses incurred by the breach of contract.. InChinese law, after the termination of contract, it is not needed to perform the debtwhich have not been fulfilled, while the part which has been performed would besolved by restitution or the other compensation measures.Role of the risk-bearing is mainly reflected in the contract of sale, delivery is themain principle. In some cases, the supplement comes from ownership doctrine (suchas lease contracts), contract set up doctrine (such as contract for the sale of goods onroad).When usual risk (force majeure, accident, influence from people outside thecontract and goods properties) happens, risk–bearing and termination of contractsolve obstacles in different ways, but the actual effect is similar. The unique difference is that the termination of the contract eliminates the contract. Becauseassumed the risk of the subject matter, it is impossible to performance the debt for thedebtor. In this way, we can say that risk-bearing cause the termination of the contract.In addition, the termination need the behavior of termination, notice to the other partyof the contract. However, there is a certain period of limitations of the right toterminate the contract. If the deadlines have passed, the party who has right toterminate contract will still be constrained by the contract. On the other hand, theeffect of risk-bearing are often regulated directly by law. When risk occurs, the resultis determined, which is not restrict by time limitation. In the case of a breach, risk ofsubject matter will be in the charge of the party at fault mostly. The risk turns back tothe charge of seller or not usually depends on termination of the contract. Terminationof the contract is the reason for the change of risk-bearing.The influence of different risk is analyzed in the first chapter. By that, we findout the differences and same point of both rules. Furthermore, we analyze the utilitychanges of two rules in the case of a breach and effect of the two rules in otherrepresentative types of contracts. After that, we compare the two rules from severalangles such as the target, the influence, the procedures and punitive effect. So we canclarify the relationship between contract termination and risk-bearing. Then we findout the possible of coexist in the practical application, the path should followed andthe direction of legislative improvements in the future.Through the analysis above, we can get the following conclusions. Firstly,termination of the contract and risk-bearing should continue to coexist in contract lawof our country. Secondly, the system of risk-bearing should be clearer and specific,such as risk allocation in the case of breach, how to deal with the contractualrelationship after damage of the subject matter. On the third place, the standards andrange of the statutory exemptions should be clarify further. Then, the settlementrelations after the termination of contract need to be improved, especially thetreatment when return of the original is impossible.