Discussion On Compensation System For Expectant Interest In The Circumstance Of Breach Of Contract

Expectant interest refers to the interest acquirable after performing a contract,and it constitutes an important part of damages system for breach of contract.Expectant interest plays an important role in maintaining self-interest of the observantparty and avoiding breach of contract. Expectant interest can promote performance ofcontract by contract parties in an actively manner and increase the cost fornonperformance of contract. The vast majority of countries and regions haveestablished this system. Although China’s Contract Law and judicial interpretationscontain rules on compensation for losses of expectant interest, it is difficult to somedegree to identify compensation for the expectant interest and calculate the amount oflosses for the features of losses of expectant interest. Generally, in judicial practices,claims for compensation for expectant interest put forward by contract parties can’tbe supported by courts. In this paper, relevant issues about expectant interest areanalyzed and discussed. It is hoped that it can be helpful in judicial practices.In Chapter1, connotation of expectant interest from breach of contract isdiscussed and conception of expectant interest is analyzed. Some features ofexpectant interest such as futurity, relative certainty, availability, property,profitability are described, and the relationship between expectant interest andrestitution interest, reliance interest, inherent interest, performance interest andexpectation interest are expounded, based on which indemnity foundation ofexpectant interest from breach of contract is established. The establishment ofcompensation system for expectant interest from breach of contract meets the internaldemand of market economy. It is conductive to exert the incentive function ofcontract and complete the civil liability mechanisms. It is required by the purpose ofcompensation for damages.In Chapter2, principle of compensation system for expectant interest frombreach of contract is discussed. In calculating and identifying losses, we should use acombination of principle of compensation, mitigation, mixed fault, and deduction ofcollateral benefits. It can not only safeguard lawful rights and interests of the parties, but also avoid some unnecessary losses undertaken by delinquent party. In addition, itwill not cause unbalanced rights and obligations of both parties.In Chapter3, rules on relative evidence to compensation for expectant interestfrom breach of contract are expounded, and assignment of burden of proof, standardof proof and categories of evidences for the losses of expectant interest arespecifically analyzed.In Chapter4, method for determining losses of expectant interest is discussed,including convention method, difference method, and estimation method.In Chapter5, some existing problems of the compensation system for expectantinterest from breach of contract in China’s administration of justice are expoundedbased on basic national conditions and references provided by successful experiencesof legislation and judicial precedents of other countries. Some conceptions onrelevant systems are put forward in order to complete legislation on damages forexpectant interest from breach of contract through applying some approaches such asclarifying the content of principle of predictability and standard for calculation ofcompensation for expectant interest from breach of contract, completing burden ofproof and standard of proof for expectant interest and broadening the free evaluationof the evidence and the empirical rules.Completion of compensation system for expectant interest from breach ofcontract is beneficial for protecting expectant interest of the observant party frombeing lost and punishing breach of contract. Through establishment of this system,both parties can be pushed to perform their obligations according to terms andconditions, for which frequency of breaches of contracts can be lowered and stabilityof contracts can thus be maintained, based on which prosperity and development ofChina’s socialist market economy can be promoted.