Discussion On The System For Breach Of Contract Due To A Third Party

The system for breach of contract due to a third party is where a party’s breach was attributable to a third person, the breaching party shall bear the liability for the third party. This liability arises from the regulation of Article 121 of Contract Law of the People’s Republic of China.(Hereinafter referred to as Contract Law) However, the legislators haven’t paid more attention on the reasons and the scope of the liabilities. Therefore, the aim of this thesis is that through the researches on the related theories and provisions, combined with the analysis of academic points and cases, to distinguish the circumstances that the debtor shall bear liability for the third party.There are three parts of this thesis. Part one: By using cases analysis, the relevant issues of Article 121 of Contract Law will be gave a brief introduction. Then, a further study shall be made to explore the legislative process of this system in order to find out why the legislators established this article. In fact, Article 121 of Contract Law is based on Article 116 of General Principles of the Civil Law of the People’s Republic of China. While the formulation of Article 116 has its own social background, and the social background has changed with the conversion of our country’s economic system.Part two: From the point of the scholars, the theoretical basis of breach of contract due to a third party are an expansion of the liability for breach of contract and an expression of the principle of privity of contract. While from the view of the courts, many courts just think that it is convenient for them to solve the disputes by using Article 121 of Contract Law, and they may ignore whether this article is fair to the debtors or not. Thus, there are two totally different opinions on this article, first is abolishing this article, second is making a restrictive interpretation of this article. And this thesis is based on the second point. As we all known, the Article 121 explains the principle of privity of contract, thus, abolishing of this article will induce a chaos in practice.Part three: Through the above analysis, this part try to interpret the scope of applying this article by making a comparison with the related legal systems, such as the system of the third party infringing creditor’s rights, force majeure, the doctrine of change of circumstances and so on. As a result, this thesis hold that firstly, when a third party infringes creditor’s rights, the debtor shall not bear the liability for the third party; secondly, when the requirements of force majeure have been satisfied, the liability of the debtor can be relieved or exempted in accordance with other provisions; thirdly, the third party shall refer to performance assistants, administrative authority and others who have a direct relationship with the debtors.