The Attribution Rule Of The Profits Obtained From Default

As the special way of civil relief,“disgorgement of illicit profit” is explicitly stipulated in the legislation of tort,intellectual property,corporate law and other fields,and plays an important role in judicial practice.However,in terms of the contractual obligation,there're no sufficient theories and practice on whether the observant party can claim for “the profits obtained by the defaulting party from its default”.Therefore,based on the nature,the elements and the types of “the profits obtained from default”(hereafter referred as “POD”),this thesis analyzes the attribution rule of the POD,focusing on the justification for the disgorgement.The introduction indicates the background of the theme,the legislation and theories at home and abroad,the demonstration ideas and the methodology in this thesis.The first part is about some premises of the theme,including the nature,the elements and the types of the POD.The concept of POD can be divided into broad sense and narrow sense.The POD in broad sense refers to the profits obtained by the defaulting party from its default.It not only includes the POD in narrow sense that should be attributed to the observant party,but also includes the POD that should be attributed to the defaulting party and should not be spit out.From the perspective of value contribution,the POD in a broad sense includes two parts of value: one is the value of the observant party's rights and interests,that is,the value of the original payment standard,and the other is the incremental value contributed by the defaulting party.Therefore,the attribution of the POD in a broad sense,especially the incremental value part of the POD shouldn't be generalized.According to the different types of obligations violated,the POD can be divided into two forms,including the profits from violation of the performance obligations and the profits from violation of the omission obligations.The second part inspects the attribution rules of the POD under the current legal system in China.Because of the principle of damage compensation and benefit forbidden,the claim for damages in a contract only involves the POD which are equal to or lower than the market value of the object of the payment,or the POD covered by punitive compensation in the specific default involving the fraud of the operator.Because the defaulting party often has the corresponding rights of the benefit source,the POD is not unjustifiable.Moreover,the scope of claim is limited to the debt elimination,i.e.market value of the object,so by exercising the claim right on unjust enrichment,the observant party also can't hold all the POD.Unlike these systems,the “impure” negotiorum gestio can make the POD including incremental value part all disgorge.However,the management relationship between the defaulting party and the observant party is hard to be established.Only in the case of the violating the omission obligations,not in the case of the violating the performance obligations,“impure” management of the observant party's affairs can be established.The third part analyzes the Disgorgement Damages in the common law system,including the justification,scope of application and the feasibility in China.The Disgorgement Damages originates from the relief for the breach of trust obligation.In the framework of trust,the Disgorgement Damages is essentially the requirement of the original obligation of the trustee,that is,the trustee has the obligation to deliver the income with incremental value.Therefore,if a trust can be presumed,all the POD shall attribute to the observant party,which is justified.As the same as the “impure” negotiorum gestio,only in the case of violating the omission obligation,the act of default can be regarded as the act of “holding the beneficiary's property and dealing with affairs”,and then the trust relationship can be established.Therefore,presumptive trust can't solve the profits from violation of performance obligations.The fourth part analyzes whether the observant party can hold the incremental value part of the POD through the Replacement Claim Right of Compensation(hereafter referred as “RCRC”)in continental law system in the case of violating the performance obligation.The key to this problem lies in clarifying the justification of the RCRC and the scope of compensatory interests.In the issue of whether the compensation interests are limited to the performance interests,experts disagree with each other.From the perspective of the legislative value,nature and system of the RCRC,as well as the economic relevance between the impossibility of performance and the transaction income,the author holds that the compensatory interests should be limited to the performance interests.Therefore,in the case of violating the performance obligation,through the RCRC,the observant party cannot hold the incremental value part of the POD that beyond the market value of the object.The conclusion part advocates to establish the framework of the attribution rule of the POD through the “interaction” between the entity and the procedure.Although,in terms of civil law system,it is impossible to deprive all the POD,including the incremental value part,but on the issue of litigation proof,especially when the object of debt is irreplaceable,it can be presumed that the POD is the loss of the observant party.It can reduce the burden of proof of the observant party and balance the interests between the parties.