Study On The Contract Rescission Right Of The Defaulting Party In China

In 2006,a series of typical cases were published in the bulletin of the Supreme People’s Court of China.Among them,a case named Xinyu Company v.Feng Yumei’s Shop Sales Contract Dispute triggered wide discussion.As the starting point of the contract cancellation right of the defaulting party in China,the system has come into public view since then,and China is constantly improving the system.In the compilation process of the Civil Code,the contract compilation,as an important chapter of the Civil Code,triggered heated discussions.As a controversial content,the right to terminate the contract of the defaulting party was finally determined in Article580 of the Civil Code after several deletion and modification.However,the article was controversial as soon as it was introduced.The purpose of this article is to eliminate the deadlock situation in the performance of the contract,which is not only caused by the breach of contract by the breaching party,but also caused by the non-breaching party’s failure to exercise the right to rescind the contract.However,some deniers do not start from the actual situation of contract performance and believe that this article breaks through the principle of strict adherence to contract.There are ambiguities in the provisions of this article,so it is urgent to issue perfect provisions in combination with domestic and foreign legislation and judicial practice.Based on the basic theory of the contract termination right of the breaching party,this paper will clarify the basic nature of the contract termination right of the breaching party,and resolve the doubts of the negationists.The contract termination right enjoyed by the breaching party is essentially the right of action,which belongs to the right of relief.In the absence of more appropriate provisions in the current law to solve the deadlock of contract,it can be given to the party breaching the contract to have the right to terminate the contract in some circumstances.This regulation can make our system of contract termination right more complete.Although Article 580 of the Civil Code gives the breaching party the right to apply for termination of the contract,there are some problems in the provisions on the applicable conditions,and there are no clear provisions on the liability for breach of contract after the termination of the contract.The damage compensation of the non-breaching party has become a key issue after the termination of the contract by the breaching party,which requires the joint efforts of legislation and justice.