On The Seller's Right Of Termination In The Installment Sales Contracts

This article is concerned with the seller's right of termination in the installment sales contracts and the comment on No.67 Guiding Case.In general,the research cores on the interpretation of Article 167(I)of the Contract Law.The article can be divided into three chapters.The first chapter is concerned with the analysis of No.67 Guiding Case.The Supreme Court denied the application of Article 167 of the Contract Law in the equity transfer contract.In order to support the Supreme Court's opinion,some scholars impose restrictions on the Article for the following reasons:(i)the characteristics of equity as an object of right,(ii)the Articles in the Contract Law which should be applied by analogy,(iii)the characteristics of installment sales,and(iv)the purpose of protection for consumers all could exclude the application.However,in the opinion of the article,the equity transfer contract shall be applied to Article 167 of the Contract Law.The characteristics of installment sales are the paying of the price by installments and the delivering of the object in advance.As a special right object in installment sales,the equity does not affect the characteristics of the transactions.Among the above reasons for limitation,which is actually controversial and need to be further discussed is the normative purpose of Article 167 of the Contract Law.The second chapter intends to explore the purpose of Article 167 of the Contract Law and meanwhile evaluates the purpose.This article holds that the purpose of Article 167 is to protect the seller.First of all,the seller's rescission right in Article 167 of the Contract Law is gentler than the general right of statutory rescission,which indicates the tendency of legislative value.Secondly,the structure of statutory term interest(legal acceleration of maturity)does not take the agreement as legal requirement,which breaks through the term planning in the general debtor-creditor relationship,making this article is more inclined to protect the seller.Thirdly,in the reverse inference to Article 167 of the Contract Law,the protection for consumers cannot be the normative purpose of this article.Finally,the investigation on the source of China's installment legislation shows that the requirement of the unpaid installments that are due amount to one-fifth of the total price may be affected by Taiwan,and the combination of rescission right and legal acceleration of maturity may be affected by Japan and Switzerland.However,Article 167 of the Contract Law abandons the prerequisite of the agreement in Taiwan's "civil law" and is different from the relationship between the installment seller's rescission right and the general legal rescission right in the Japanese and Swiss civil laws.In conclusion,the structure of Article 167 of the Contract Law is an intentional amendment in the process of the Transplantation of Law.At the aspect of value,Article 167 of the Contract Law changes the traditional legislative practice of installment sales,which tends to the protection for the seller,has its legitimacy and rationality.Firstly,it is nowadays the trade situation which adopts payment by installments changes.Early object of installment sales contract is related to life commodities,which concerns with the interest of the survival and socially disadvantaged group.Base on that,the purpose of installment sales legislation should be the protection of the buyer.However,nowadays installment sales are common in commercial transactions,and the object of installment sales contract in civil trading is usually for daily consumption.Secondly,installment sales are increasingly to be the tool of credit economic,so those contract characteristics are inclined to credit contract,with the function of both financing capitals and financing goods.Thirdly,the essential characteristics of installment sales is that the seller grants the buyer term interest in advance.Compared with normal sales contracts,the seller's additional risk of credit should be protected.The third chapter evaluates the legal structure of Article 167 of the Contract Law in the value position.This article holds that although the purpose of Article 167 of the Contract Law is legitimate,the purpose fails to come true due to the improper structure.First of all,legal acceleration of maturity and right of rescission coexist and are without restriction on the sequence of performance,which deprives the buyer's interests excessively and does not meet the requirement that the legal effect the object of option causes is as equal as possible.Secondly,the legislator regards "seriously affecting the expected economic benefits of the contract" as a type of fundamental breach,which is a misreading of the frustration of the purpose of the contract in delayed performance and causes the contradiction in legal evaluation.Finally,the Supreme Court imposes the purpose of consumer protection on Article 167 of the Contract Law,which actually confusing "protection for buyer" with "protection for consumer",making the purpose of the Article 167 deviate from the structure,and leading to the crux of interpretation.This article holds that the characteristics of installment sales can only directly generate the structure of legal acceleration of maturity,and the granting of the seller's rescission right is the once more inclination of the legislator.In terms of legal system,Article 167(I)of the Contract Law and Article 94(III)and(IV)of the Contract Law is the special and general relationship.In order to ease the re-slant of legislation and solve the contradiction of legal evaluation,when applies the rescission right of Article 167,courts shall apply analogously the requirements that the lessor holds in Article 248 of the Contract Law.In addition,the Article 167 of the Contract Law should not undertake the task of consumer protection,which should be solved by the special civil law.Firstly,there is no tendency of socialization legislation and integration of special civil law in the Contract law.Secondly,Consumer Law and other special civil laws have speculated corresponding general provisions,thus the Contract Law does not have to bear the burden.Thirdly,standard clauses in the field of consumer law are wider in interpretation than in the field of contract law,which can regulate other clauses other than the clause of term interest.Under the current legal system,the unfair and unreasonable articles in installment sales contract could be regulated by the Article 26(II)in the Consumer Law.While the scope of the Article 26(II)is limited to format contract,and its invalid result of application is too hard,thus later legislation shall speculate the various types of clauses in installment sales contract.In addition,as to protect consumers,the Article 167 of the Contract Law should be limited in the field of consumer.It is precisely that(i)the enforcement of recession right that business operators hold shall urging consumers in advance;(ii)the unpaid installments of consumers shall be enhanced to more than a third;and(iii)the additional installment interest(if has)shall be deducted in corresponding proportion of repayment in advance.