A Study On The Defaulting Party's Right To Rescind The Contract

In the process of compiling the Civil Code,there was a great controversy about the defaulting party's right to rescind the contract in the compilation of the Contract Law.The problem was caused by the case of Xinyu Co.,Ltd v.Feng Yumei,which reflected the lack of corresponding provisions to break the contract deadlock in the Contract Law.Although the Supreme People's Court confirmed the judicial path to allow the defaulting party to rescind the contract in order to deal with this situation in this communique case,the conditions and methods have not been refined,and the basis of the defaulting party's right of rescission can not be found in the provisions of the current law of China,which leads to conflicting judgments in similar cases in judicial practice.Although there are different opinions on this issue in the academic circles,we can still find a consensus part from it,that is,we can regard the defaulting party's right of rescission as a special rule.In view of the comparative law,though there are relevant remedies for the defaulting party,there is no legislation providing for the defaulting party's right of rescission.To make this rule in line with the Chinese context,we need to break the misunderstanding of efficiency breach in the common law system and analyse its application space based on the internal principles of fairness,good faith and contract rescission system of the Contract Law in our country.At the same time,it should also be based on the analysis of the actual effect of judicial practice,finding out the problems in the trial work and summarizing the useful experience.Taking into account pursuing efficiency and emphasizing fairness throughinstitutional arrangement as far as possible,exercising the right of rescission in litigation mode and strictly limiting its application conditions,on the one hand,it can avoid the defaulting party to terminate the contract at will and the observant party to implement opportunistic behavior,achieving the effect of encouraging both parties to solve the problem through consultation,on the other hand,it can ensure that the observant party is fully compensated and realize the purpose of balancing the interests.