A Research On Legal Regulation Of Abusing Legal Rescission Right

In the ancient Roman law period, the debt was viewed as a "legal lock". When a debtor failed to fulfill the contractual debt, the creditor was entitled to arresting and taking the debtor in custody, hence, the contract shall not be arbitrarily cancelled after the conclusion of it. It was not until modern times, with the establishment and development of the Western concept of "freedom of contract", that the freedom of terminating the contract as the main content of "freedom of contract" was naturally determined. The principle of the contract freedom is a breakthrough of the spirit of "Strict Contract Compliance" required by the Roman law, which impenetrate the "Contract Law" as a basic principle. The system of contract rescission is derived from the principle of contract freedom, whose purpose is in the pursuit of a value higher than "Strict Contract Compliance". It is a destruction of the original contract. In order to protect the security of transactions, we have strict rules upon the application of the contract rescission system; otherwise, it will become the soil propagating abuse. In this thesis, the author analyzes the basic principles of the contract rescission system and the theoretical basis for the legislative setting of legal rescission right, observing the possibility of propagating the abuse this right from the basic nature of its own. Comparing "contract liability" with "breach of contract remedies", which are two viewpoints on the nature of legal rescission right, the author puts forward that the property of legal rescission right shall be a remedy right of the breach of the contract, which is endowed to a party by law in order to balance the interests of the three parties. Penalty or sanctions are possible consequences resulted from the exercising this right, but not a necessary function of its own. The author makes the comparative study comparison and research among three Chinese contract laws and contract laws of some foreign countries, finding out the unreasonable and absent points of legal rescission right terms in Chinese contract laws. For example, the legal rescission right terms in Chinese contract laws are too generalized, lacking detailed provisions; for a very important content among the legal rescission events-the "purpose of contract", there is no any lawful terms to ensure its definition; The miscellaneous provisions on legal rescission events may easily lead to confusion of lawful terms in practice; the provisions on the exercising procedures of the rescission right in "The Contract Law" are too general. The original point in this thesis lies in that, first of all, it proposes that the property of legal rescission right shall be a right of breach of contract remedies, which not only inherits the viewpoints on the nature of legal rescission right substituting "breach remedies" for "contract liabilities" acknowledged by most countries in the world today, but also puts forward that it is a kind of right, which is different from the results of the previous literature study. The past literatures mainly adopted the concept of "remedy path". In the second place, it argues that although the adoption of "contract constitution" pattern has not been clearly put forward in China so far, the Chinese contract laws have tended to adopt this legislative pattern as a whole. In this pattern, we shall stress the autonomy of the parties, which does not mean encouraging the exercise of a contract rescission right. We should always carry out the core conception of maintaining the stability of the contract. Then, in order to find out a balance point between the autonomy and restricting the exercise of the contract rescission right, we shall refine the terms of the contract when entering into a contract, resolving the disputes between the parties according to the contents of the contract, which is not only consistent with the trend of the times, but can also play a role to restrain the abuse of legal rescission right. At last, the author concludes that we should re-understand the legal rescission right from the perspective of economic benefits, utilizing the idea of cost accounting to determine whether or not it constitutes the abuse of the rescission right. Because the law allows the parties to rescind the contract by exercising their rescission right, there contains a problem of the measurement of whether it is fair, which involves the measuring standard. In this thesis, the author proposes that using the cost accounting concept in economics as the standard to determine whether it is fair, which is another original point in this thesis. Therefore, the purpose of the author’s research on legal rescission right is an attempt to find out some methods which are able to restrain the abuse of this right, in the hope of leading into deep and further discussion by scholars, avoiding the unfairness towards some parties in practice caused by the abuse of the legal rescission right of cancellation some parties to an.