A Research On The Right To Terminate The Contract Of The Breaching Party

There is a great dispute between the breaching party in both the relevant theoretical research and the legal formulation..Paragraph 2 of Article 580 of the Civil Code establishes the contract termination system of the breaching party,it reflects the legislator’s efforts and determination to respond to social concerns in a timely manner,solve the difficulties in judicial practice,and make up for legal loopholes.As a new Contract Law rule,paragraph 2 of Article 580 of the Civil Code is more principled,especially the provision of the constitutive elements of the rules,which are highly generalized and need further analysis.Accurate understanding of the legislative spirit and intention of the clause will help to apply the rule correctly and play its due role in breaking the deadlock of the contract.Through statistical analysis of the relevant cases,it can be concluded that in judicial practice,the courts usually support the breaching party’s request to terminate the legal relationship with the other party,but the reasons for the decision are not uniform.Specifically shown as:One is that the current law does not prohibit the breaching party to cancel the contract,according to the concept of "no prohibition can be done",that can be the breaching party shall enjoy the right of termination;Secondly,the judge cited the basic principles of civil law to prove that the breaching party can reduce unnecessary performance costs and maximize efficiency by terminating the contract,and that the non-breaching party’s demand for continued performance is contrary to the principles of fairness and honesty and credit.thirdly,the judge drew on the second instance decision in the “Xinyu case”.Under the condition that the cost of compulsory performance is too high,the termination of the contract is justified;fourth,the subject of the statutory right of termination is interpreted expansively.In addition,some courts have taken a negative attitude toward the request of the defaulting party,as the right to rescind as an important relief should be enjoyed by the non-breaching party,and the defaulting party should bear the responsibility for breach of contract based on the principle of continued performance,without a clear legal basis to support the defaulting party to rescind the contract may easily lead to "efficiency breach" consequences,and damage the market transaction.An important reason to oppose the establishment of the right to terminate the contract of the breaching party is that the existing situation change system is sufficient to solve the contract deadlock dilemma,but the two have obvious functional differences.The system of the right to terminate the contract of the breaching party aims to solve the problem that one party wishes to terminate the contractual relationship with the other party in advance due to subjective and objective reasons,but the other party refuses to terminate the contract,resulting in the stalemate that the contractual relationship exists but can not be actually performed.Change of circumstances is committed to solving the problem of unforeseeable change of objective circumstances during the performance of the contract which may result in the apparent unfairness of the party to continue the performance.There are three differences between them in function configuration.First of all,the situation change can not solve the claim of the breaching party for the relief of rights in case of non-malicious breach,but it only shares the loss between the two parties without fault based on the principle of fairness.Secondly,both parties under the situation change are in the same protected position and have the right to actively request the judicial organs to change or terminate the contract without consensus,so the system does not meet the protection of the breaching party in solving the contract deadlock.Finally,there are two kinds of legal consequences under the situation change,change contract and rescission contract,change takes precedence over rescission,in order to maximize the maintenance of the original validity of the contract.But under the deadlock of the contract,the validity of the contract does not have the need to continue.Therefore,the situation change has the function short board under the solution contract deadlock predicament.The breaching party must abide by strict requirements when exercising the right to terminate the contract.When the legal conditions are met,the breaching party only has the procedural right to propose to the competent authority to terminate the contractual relationship,the authority must give comprehensive consideration whether the purpose of the contract is really not fulfilled,the breaching party is not a malicious breach,the compliance party insists on continuing to perform the breach of the principle of fairness and good faith,and the non-pecuniary obligation can not be fulfilled.In the end,the authority determine whether to support the breaching party to terminate the right and obligations of both parties.