On Anticipatory Breach Of Contract

The system of anticipatory breach of contract is a unique design of Common Law System. This design is set against the performance risk, which may arise in the period from the contract coming into effect to the mature date. This system fully expressed the principles of good faith and fairness, therefore, it can not only reduce the losses produced by a breached contract, but also settle the disputes timely, so no wonder it can cut down the manly loss to a great extent. Based on the above advantage, many scholars refer to this design as the wonderful contribution made by the common law system to human civilization.Fully realized the advantages of such a design, many of our scholars are trying to introduce it in our legislation, hoping to provide a perfect method for the remedies to the party who may suffer from a loss because of the other's declaration of nonperformance, may it be in the form of words or acts, during the period from the conclusion of the contract to the maturity of the date of performance. As a comprehensive legal system, however, it also combines many ways and methods that are suitable for the settling of different kinds of disputes accordingly. Take one of the regulations as an example, it not only contains a remedy design, but also has a defense right, which are considered to be totally confronted. So the author thinks that it is not wise to introduce a kind of system like this into our legislation, or it would bring a mass to our present legal system.As a matter of fact, countries of the civil law system have already developed a set of shaped system against the said problem. This is the so called Einrede der Unsicherkeit, a term originated from German, which provides a relief in case of negative breach of contract committed by the party who is liable for latter performance. Yet when the party who should perform lately refused to effect counter performance or furnish security, this kind of system can only provide a negative defensive right for him, which means he can not exercise such aggressive rights as ending the contract. Yet if the party who is responsible for latter performance refuses to effect the counter performance or furnish security to the extent that the purposes of the contract can't be realized, the other one can rescind the contract according to the rule of fundamental breach of contract. Even if the party's nonfeasance hasn't endangered the realization of the contract purposes, the obligee can also rescind the contract because the obligator has changed from negative non-performance to positive non-performance. So it is obvious that the earlier-performance obligator's right to rescind derived not from the system of Einrede der Unsicherkeit but from the system of contract rescission. Before the date of performance, if the obligator refuses to performance negatively, that is, he refuses to perform though he can without legal basis, the obligee is vested to choose between insisting on the fulfillment of the contract and nullify it according to the repudiation. This is the system of anticipatory repudiation. It is a extensive interpretation to the repudiation system. Though it is not explicitly provided in the German Civil Law, yet it is widely acceptable in judicial practice. The scholars in Taiwan also consider it to be resonable. So, in our country, there is no need to introduce the anticipatory breach of contract system, because we can use the system of Einrede der Unsicherkeit , rescission of contract and anticipate repudiation to deal with the same problems which the system of anticipatory breach of contract does.There are seven parts except for the introduction part in this thesis. The introduction mainly presents the background of the birth of the anticipatory -breach system and relative systems in Civil Law countries. Seven sections areinvolved in the first part, which include the concept, formation and development of the system. The second part is made up of two sections, in this section the author introduces both the system in America and in England. The third part analyses the system's value from the angles of fairness, effectiveness and safety. The fourth part introduces six theories on the system, and shows I prefer the theory that the anticipatory breach is actual breach. The fifth part is one of the high lights: firstly, it reasons that the scientific name of the anticipatory breach should be "qiqianweiyue"; secondly, it reasons that the character of the anticipatory breach is actual breach from the light of the legal act's consequences. Then I indicate that this is not anticipatory breach of contract when the obligator doesn't refuse to perform by word or conduct because of no malevolence even though there are plenty of evidences proving the obligator's inability to perform before the date; lastly, I point out the date the obligee can ask the obligator to bear the responsibility : if it is conditioned contract , he can exercise the right only when the condition is mature; if it is timed contract, the obligee can exercise the right immediately. The sixth part is the second luminous spot: I conclude that we need't introduce the anticipatory breach of contract through comparing the system of anticipatory breach with the relative systems in Continental Law countries. The seventh part analyses the relative legislations in our county's Contract Law .It figures out the cognition errors on the contract legislation in the dominant ideology through research, and makes some suggestions on how to improve contract legislation.