Research On The Legal Issues Of The Right To Rescind The Contract Of The Defaulting Party

There has been a long history of dispute about the default party’s rescission right of contract both in theory and judicial activities.This problem results from contract deadlocks in practice.A contract deadlock occurs when the default party refuses to fulfill the contractual obligation to avoid obvious unfair outcome while the other party refuse to rescind the contract.Should the default party be entitled the rescission right?There is a huge controversy about this issue.In past judicial practice,courts solve the problem in different ways,leading to inconsistent judgements in some similar cases.As a response,article 353 of Civil Code Contract Part(the first review draft)once stipulated that the default party could plea courts to end a contract in deadlock.This rule is modified in Civil Code Contract Part(the second review draft).However,it was not adopted by the People’s Republic of China Civil Code finally.Instead another rule is set up which allows termination of contracts with contract parties’ application as the procedural condition.A lot of contract deadlocks need to be solved by other ways since the application of article 580 of Civil Code is limited and contract frustration rule and derogation rule can only solve a small part of those contract deadlocks.It’s meaningful to terminate a contract by default party’s application even in Civil Code era.In view of fairness,efficiency,honesty and credibility value,the default party shouldn’t be denied the right to rescind a contract completely.Meanwhile,the default party shouldn’t be allowed to end a contract by himself in case of negative impacts on contract order.It’s the best way to break a contract deadlock that the default party file a application and then the tribunal make the final decision.The application of the default party’s rescission right should be restricted in some degree.The judgers should make decisions according to different situations in cases and take into consideration that if the party break the contract intentionally,if the specific performance is unfair and if the honesty and credibility principle is violated.