Recitification Of Anticipatory Repudiation And The Unsafe Right Of Defense

There has always been a controversy of the relationship between the unsafe right of defense and anticipatory breach.The aim of this article is to solve a series of problems such as confusion of application and vague determination standard concerning these two systems in judicial practice.More specifically,two main points are shown in the current law.One is to clarify that the normative meaning of Article94,Item 2 of the Contract Law should be anticipatory repudiation,and Article 69 is the right to terminate the contract under the unsafe right of defense different from anticipatory repudiation.The two concepts should be completely distinguished,and the view that these two articles together constitute the pre-default system in China is still in question.The second is that Article 94,Item 2,and Article 108 of the Contract Law serve as relief for the anticipatory non-performance of the contract.The special differences that are different from the default period cannot be ignored and thereby it is necessary to discuss it.After raising the question in the introduction,through clarifying the concept of anticipatory breach and anticipatory repudiation,the article ascertains that anticipatory repudiation is actually the typical mode of anticipatory breach and its relation with the full performance guarantee system similar to the unsafe right of defense is side by side instead of inclusion.Anticipatory repudiation has its independent value and legitimacy foundation which is not comparable with the unsafe right of defense.Although there is no special provision in some of the legislativecases in the implementation of the obstruction Law,refusal to perform has the applicable space of occasional delay in performance,its independence cannot be denied.In addition,the refusal to perform and impossibility of performance should be distinguished.They can only be concurred when the debtor's actions cause impossibility of performance,but such concurrency does not affect the independence of anticipatory repudiation.After clarifying that anticipatory repudiation is not involved with the unsafe right of defense,the next step is to resolve the relationship between the unsafe right of defense and the full performance guarantee system during the anticipatory repudiation.As two kinds of remedies for creditors under “unsatisfactory performance”,the comparative analysis of the two shows that the difference between the two is very small and the system connotation and behavior patterns are basically the same which is hard to tell which one is better.However,the unsafe right of defense under the provisions of the Contract Law is limited by the meaning of the text,and it must be explained with extension to provide the party further protection.This article combines the similar legislation such as Article 321 of the German Civil Code which was implemented after the implementation of the Law on the Modernization of the Debt Law in 2002 and Article 71 of the United Nations Convention on Contracts for the International Sale of Goods and comes to a conclusion that the right of termination should be a further remedy for creditor in logic and in policy after exercising the unsafe right of defense,which can be regarded as an expansion of the effect of the unsafe right of defense.In combination with the full performance guarantee system,on the other hand,the expansion is characterized by the suspension of the performance of the performer before the performance period,that is,the suspension of the preparatory act,in order to avoid the delay liability caused by the suspension when the suspension party responds to the other party's non-performance risk.Such exemption should not be differed because of the order of performance.Therefore,the applicable subject of the unsafe right of defense should not be limited to the partieswho performed the order first,whereas both parties have the possibility to apply it.Therefore,the independence of the system of unease defense should be adhered to in the Contract Law.Article 69 of the Contract Law is not related to the anticipatory breach rules and can be completely distinguished.Article 94,item 2 of the Contract Law only stipulates anticipatory repudiation,“clearly indicating to refuse to perform the contract obligation” is an express refusal to perform,and “with its own behavior indicating that the contractual obligation is not fulfilled” is an implied refusal to perform.The purpose of the article cannot cover the full performance guarantee system of the Anglo-American legal system.The right to terminate of Article 94 and Article 69 are different and thereby the latter cannot be regarded as the foundation of the former,or even equivalent to the former.Finally,since the provisions of the Contract Law regarding anticipatory repudiation are too general,it is necessary to make special explanations on the difference between it and the breach of contract.This article mainly summarizes two differences.The first difference lies in the need to meet the two requirements for the judgment of whether certain action constitutes the anticipatory repudiation.More specifically,on the one hand,the debtor's refusal to perform must be highly determined,and the specific criteria differs depending on express refusal and implied refusal but it is different from the degree of certainty under the unsafe right of defense;on the other hand,it must meet the requirement of seriousness of consequences,which is that the consequences of the refusal must essentially render the purpose of the contract impossible.The second difference lies in the fact that after constituting anticipatory repudiation,the creditor may choose to immediately terminate the contract in accordance with Article 94,Item 2 of the Contract Law and request the other party to bear the liability for damages or liquidated damages in accordance with Article 108 of the Contract Law,or seek the corresponding relief until the performance has fulfilled.In principle,there are no restrictions on creditors' choices,but the relative limitations of the derogation rules should be considered.Theoccurrence time of the derogation obligation is in principle subject to the creditor's acceptance of the refusal,and the exception is advancing it to the performance of refusal.The creditor's right of termination is not based on the debtor's fault.If the performance before the period is not possible,the same treatment should be taken,but the claim for damages must be considered separately.