Research On The Replacement Claim Right Of Compensation

The Replacement Claim Right of Compensation (RCRC), one of the results ofimpossibility of performance, is an important way to relieve creditor’s rights.Generally it applies to the condition when obligatory relationships fail to be wellperformed, but the debtors acquire interest due to the same cause for the impossibility.Based on the principle of fairness and avoiding debtors’ unjust enrichment, thecreditors should be allowed to obtain interest arising from debtors’ impossibility ofperformance. In the countries implementing traditional civil law, most of them definethe RCRC in the system of impossible performance in civil code. This paper intendsto analyze elements and legal consequences of RCRC and put forward suggestions forestablishment of RCRC in China, based on the provisions in other countries andregions about RCRC (mainly including285th article in German Civil Code,2ndtermin225th article in Taiwan civil code) and the related theories.This paper is divided into four chapters. Chapter one is the introduction, brieflyintroducing the significance and relevant legislation of RCRC, the legislation basisand the scope of application. The analysis and interpretation of RCRC is based oncompensation claim and mainly based on the285th article in revised German civil law, so this chapter also defines in detail the effect of impossibility of performanceinrevised German civil law.Chapter two explains the elements of RCRC. Specifically, it analyzes theprovisions about RCRC in German and Taiwan "civil law" and other related theories,then accordingly, it is concluded that RCRC occurs based on the five elements, theobligation of performance is removed due to impossibility, the debtor has theobligation to pay according to specific standards, to obtain compensatory interests andthe compensational interests have causal relationship with the causes to impossibilityof performance and the original payment standard shall have identity withcompensatory interests. In addition, Chapter three also discusses in detail thecomposition of judgment standard, and, combined with related theories, analyzes thecontroversial issues embraced in determining components of RCRC in practice.Chapter three explains the effectiveness of RCRC. The effectiveness of RCRCfirstly lies in the provision that debtor can request creditor to hand over his benefitsobtained due to its impossibility for compensation performance, and this provisiondefines the creditor’s subrogation, and the compensatory interests are not necessarilytransferred to creditors. Then, this part mainly analyzes when debtors attribute to theimpossibility, creditors can also enjoy the right to request RCRC and rights to claimscompensation for damages, but the creditors request interests of replacement, theinterests shall be deducted from the rights to request compensation for damage. In thebilateral contract, if the oblige exercises the right to request compensation, he stillshas the obligation to perform payments. The285th article and the third of article326th in German civil law fail to coordinately define the relationship among thecreditors’ RCRC, the right to claim compensation for damages and fulfillment ofobligation to pay, so creditors may repeat the payments so as to gain compensatoryinterest in practice. Then case analysis is done to illustrate the problems, and twosolutions to the problems raised by German scholars are put forward for reference.Chapter four propose suggestions for legislation about RCRC, according to theanalysis of different legislations for RCRC system since Min Dynasty in China, andthe draft legislation proposed by contemporary scholars.