Judicial Protection Of The Breaching Party’s Rescission Of The Contract

In 2006,the communique case "Xinyu company v.Feng Yumei shop sales contract dispute case"(hereinafter referred to as "Xinyu case")published by the Supreme People’s court made an exception to support the defaulting party to terminate the contract.After the academic circles continued to dispute the issue of the defaulting party’s termination of the contract.Scholars gave different answers and local courts also had different practices,from whether the defaulting party should be given the right to terminate the contract to how to solve the contract deadlock.The rule is a model of practice first,which is derived from the objective needs of social life and the experience of judicial practice.Article 48 of the minutes of the civil and commercial trial meeting of the national court in 201 9(hereinafter referred to as the minutes of the Ninth People’s court)stipulates the rule.Then,paragraph 2 of article 580 of the civil code,which came into force in 2021.partially modifies the draft in order to avoid excessive disputes.However,its nature subsequently caused controversy.Some scholars believe that this article is not the rule of rescission of the defaulting party,but the provision on the termination of the contract.The essence of this paragraph is still the provisions on the rules for the termination of the contract by the defaulting party,and its exercise method must be applied to the court or arbitration institution.This provision is a restriction made to avoid the abuse of rights by the defaulting party.Allowing the breaching party to terminate the contract is to solve the contract deadlock in judicial practice,which is reasonable and necessary.It can effectively improve the efficiency of resource utilization,balance the interests of both parties,and solve the problem that other systems in contract law cannot solve the contract deadlock.A contract in a deadlock has no meaning.If it cannot be performed continuously,the breaching party breaches the contract without malice,or brings a lawsuit or arbitration to a court or arbitration institution,the breaching party shall be allowed to terminate the contract,so that both parties can get out of the deadlock and re-enter into a new transaction.This clause gives the court a clear legal basis to support the breaching party to terminate the contract,but it must be further refined in terms of applicable conditions,legal consequences after termination.termination time,scope of application and other issues,so that the court can judge cases like cases.