Research On The System Of Dissent Period Against The Right To Terminate Contract

Objection right against contract termination and the dissent period issues are specified in legislation of 1999 People’s Republic of China Contract Law(Article 96) and the 2009 Supreme People’s Court’s Interpretation on the Application of People’s Republic of China Contract Law(b)(hereinafter referred to as the Contract Law Interpretation II)(Article 24). Article 96 of Contract Law provides that in exercising the right to protest the termination of contract by one of the Party, the other Party could bring a suit to court or arbitration committee, to further confirm the validity of termination. This is the so-called Right of Dissent. Article 24 of Contract Law Interpretation II further provides that the statutory dissent period shall be three months if not agreed otherwise, from the arrival day of termination notice. Despite of the regulations above, it stills remains unclear on a series of questions regarding the dissent period. The law remains silent in many other key issues, such as what is the nature in law of the dissent period? Whether provision of three months’ length is reasonable? Whether the right to dissent is a right in itself? What kind of definition falls in the range of Right actually? How to define the validity of contract during the dissent period? What is the liability for damages after the dissent period? What’s the link between unauthorized termination and the length of dissent period? For these problems, legislation at present does not deliver a clear and adequate legal provision or interpretation. So there are still a series of problems in legal theory and practice to be discussed and to be solved in the future.Based on the right of contract termination and the exercise of the termination right which has been stipulated in Contract Law, my research and this dissertation hereinafter has used various legal research methods, such as value analysis, empirical analysis methods, literature research, semantic analysis, logical analysis, comparative law, a measure of interest, history and many other research methods. Comprehensive study on a international perspective focuses on a series of issues arising from the dissent right and period problem. By introduction of the concept of “Formation Objection Right” from the German law, it can be a good reference for researching of PRC dissent right of contract termination, and certainly will bring into more reflection and discussion among us. The dissent period was set within 3 months in article of Contract Law Interpretation II. However, the rationality of the length of 3 months has raised great dispute among scholars. On period itself, if the length of the opposition period is too short, it might not be able to protect the legitimate rights and interests of the parties, even will undermine the authority of the law. On the other hand, it is also a controversial question whether this period should be retroactive. This article is to explore these questions. Based on the preliminary research, we can reach to the conclusion that this objection period regulation shall not have retroactive force. During the statutory dissent period, whether the termination of contract is valid, the effectiveness of this issue should be considered in a pending state. Furthermore, if the lawsuit raised by the opposite Party exceeds the statutory dissent period of 3 months, the court should take the Formation Examination Approach as a main principle instead of Substantial Examination Approach.Finally, for other damages, the study come to the preliminary conclusion that if one of the Party terminates the contract for a malicious reason, then the termination Party should bear liability to recover the liquidated damages suffered by the other Party in good faith.