Analysis On The House Sale Contract Case Of A Person Against A Construction Company

Article113of the Contract Law of the People’s Republic of China (hereinafter referredto as “the Contract Law”) provides that “Where a party fails to perform its obligations underthe contract or its performance fails to conform to the agreement and cause losses to the otherparty, the amount of compensation for losses shall be equal to the losses caused by the breachof contract, including the interests receivable after the performance of the contract, providednot exceeding the probable losses”. However, the clause only makes relatively generalprovision for anticipated interests, which is seldom applied by the court in the judicialpractice owing to the lack of specific operability, causing no unified general theory or legalprecedent with relatively large influence all over the country. This thesis has a limited view onthis issue and endeavors to probe into and discuss the issue through analysis on a case, hopingto stimulate more opinions on the management of the issue in the judicial practice in thefuture. In addition to the introduction and conclusion, this thesis consists of four parts: PartOne introduces the house sale contract in which the plaintiff brings a lawsuit against AConstruction Company and concludes three focuses in dispute, including whether the contractinvolved is valid or not, the condition for rescission of the contract by one party involved inthe contract is satisfied, which party shall be entitled to the unilateral rescission right, whetherthe party entitled to the rescission right is able to perform such right by way of lawsuit andwhether the losses of anticipated interests after rescission of the contract is able to becompensated and what is the compensation scope. Part Two summarizes the disputes anddisagreement concerning the focuses in dispute, that is, the certain person brings the lawsuitagainst A Construction Company to rescind the contract and claims the compensation foranticipated interests thereby, initiating the research on the related legal issues and differentopinions on the handling of the case, and enumerates two or three handling opinions totallydifferent from each other and respective reasons for their assertions for each focus in dispute.Part Three researches the conclusion and discusses the legal theory and legal basis involved ineach opinion. The author makes analysis according to the current theories and practical statusquo, begins from the analysis of whether the contract with basic problems is valid or not,earnestly analyzes the circumstances in which the contract is invalid, the validity of thecontract in which the creditors’ right is transferred and the requirement for validity, the conditions for the satisfaction of rescission of the contract and the way to perform of therescission of the contract and the advantages and disadvantages of claim of anticipatedinterests. At last, the thesis combines theory with practice, makes comprehensive analysiscombined with the case and concludes the handling opinions for the focus in dispute in thecase and the conclusions, that is, where the contract involved in the case is valid, the certainperson, as the observing party is entitled to the legitimate rescission right of the contract andcan perform such right by way of lawsuit and in the meantime gain the corresponding thecompensation for the losses of anticipated interests after the rescission of the contract. PartFour draws the current foreign theoretical achievements and practical experience, proposesfurther thoughts of the author on the legal issues related to the case, suggests that in the futurethe legislature or judicial authority promulgates the relevant legal provisions or judicialinterpretations, in the premise of strictly limit the application conditions, support theanticipated interests in the judicial practice so as to protect the trade stability, to subside thelosses suffered by the observing party after the breaching party maliciously breaches thecontract and highlight the core value of the “principle of good faith” in the civil law. In themeantime the author proposes that where there is no definite provision for the amount incompensation, the computation method of objective standards as the base and the subjectivestandards as the supplement shall be adopted, and the discretionary power of the judge shallbe appropriately retained, in which the judges shall apply the standards to handle cases in thespecific cases.