Research On The Right To Rescind The Contract Of The Breaching Party

The exercise of the right to rescind the contract affects the realization of the purpose of the contract and affects the interests of both parties.Therefore,the traditional theory of the exercise of the right of rescission is generally limited to the observant party.As the main body to exercise the right to rescind the contract,the breaching party is not only lack of explicit provisions in the current law of our country,but also in the judicial practice and theory of constant disputes,has not yet reached a consensus.With the increase of cases in judicial practice in which the breaching party takes the initiative to rescind the contract,granting the breaching party the right to rescind the contract has become an urgent requirement to break the "deadlock" in contract performance and improve the overall operation efficiency of the contract.Article 353(3)of the second draft of the civil code of China's contract(draft)also responds to the contract rescission right of the breaching party in the form of legislation trends.This paper agrees with the viewpoint that the defaulting party enjoys the right to rescind the contract in specific circumstances,extracts the root cause of the problem from typical judicial cases and doctrines,demonstrates the legitimacy of the defaulting party's right to rescind the contract from a theoretical level.Furthermore,this paper advocates to restrict the exercise of the rights of the breaching party from the two aspects including the applicable conditions and the liability for damages.In addition to the introduction and conclusion,this article is divided into four parts:The first part introduces the application dilemma of the contract rescission right of the breaching party in China,and expounds it from two aspects of the judicial ground and the academic disputes respectively.This article summarizes the typical and representative cases which support the breaching party to rescind the contract in judicial practice,and concludes that the court mainly uses four types of trial grounds as ratio decidendi.The four main reasons for the decision include: use "Freedom if not prohibited by law" as the ground of the judgement;use article 94 of the contract law as the ground of the judgement;use article 110 of the contract law as the ground of the judgement;use article 94 and article 110 of the contract law as the ground of the judgement.Among them,"law is not prohibited but free" obviously does not have the ground for judgment.The other three judicial paths are left to be demonstrated and explained below.The chaotic ratio decidendi of judicial practice has led to the divergence of the theoretical viewpoints in China,which is mainly manifested by two opposing theories: the theory of the non-breaching party's right to rescind the contract and the theory of the breaching party's right to rescind the contract.Through the analysis of the disputes between the judicial practice and the theory,this paper argues that the root of the problem lies in the absence of the theoretical basis and the claim basis of the right to rescind the contract of the breaching party.The second part focuses on the justification of giving the defaulting party the right to rescind the contract.Through the explanation and demonstration of the other three judgment paths that support the breaching party to rescind the contract in judicial practice,this paper holds that article 110 of the contract law should be taken as the ground of the claim right of the breaching party to rescind the contract.After clarifying the basis of the right of claim,this paper further demonstrates the rationality of giving the defaulting party the right to rescind the contract from the theoretical level,which is carried out from the three aspects of the choice of the remedy for breach of contract,the dialectical analysis of the theory of efficient breach of contract,and the purpose and function of contract termination.The third part focuses on analyzing and demonstrating the regulatory path of the breach of contract right of the defaulting party.Regulating the breach of contract right of the defaulting party should be based on the clarification of its application boundary with the principle of change of situation,and based on the differences between the two,we should be alert to the tendency to apply the principle of change of situation to the defaulting party's right of contract rescission blindly.The exercise of the right to rescind the contract by the defaulting party shall be limited to specific circumstances and meet the basic applicable requirements.In view of the particularity of the circumstances in which the breaching party exercises the right to rescind the contract and the applicable requirements,this paper proposes to draw on and introduce the judicial termination model in French law so as to coordinate the value of contract efficiency and security.The fourth part analyzes the liability for damages to be borne by the breaching party.Based on the nature of compensation for damages liability,the basic position for determining damages should be the loss suffered by the contracting party.From this basic standpoint and according to the requirements of the principle of full compensation in China's contract law,both the non-breaching party's active loss and the loss of available benefits should be included in the basic scope of damages.At the same time,the foreseeable rules and derogatory rules should be reasonably applied to limit the amount of damages,prevent the breaching party from assuming excessive liability,and equalize the interests of the contract parties.