The Result Of Statutory Revocation Of Contract

After the statutory revocation of contract goes the risks of loss back to the seller. This norm is related to the results of statutory revocation and these results can be primarily divided into two categories: total result and concrete result.According to different theories, for example “theory of direct result”, “theory of indirect result” and “theory of return relationship”, are the total result of statutory revocation different. “Theory of return relationship” fits with the fundamental institution perfectly, brings plenty of practical benefits and deals with the methods of interpretation of law.The not performed duties perish automatically; performance received and emoluments taken should be in consideration of the situation of performance and the character of the contract to decide to return or to take others measures or to compensate damages.First must the obligor return the performance received and emoluments taken in natural way. In concrete situation must he return the title of property and the possession of the goods or only the possession of the goods, for example “sell with retention of title”.Sometimes is the return of performance received and emoluments taken impossible: Restitution or return is excluded by the nature of what has been obtained; the obligor has used up, disposed of, encumbered, processed or redesigned the object received; the objet received has deteriorated or has been destroyed. In lieu of restitution or return, the oblige may demand the reimbursement or claim to reimbursement of the object owed. The obligor can also provide compensation for value. Three different situations must be distinguished: normal usage; abnormal usage; primary normal usage. The deterioration that is caused by the objet being used in accordance with its intended use is not taken into account.If consideration is specified in the contract, then this is to be used as a basis when the compensation for value is calculated; if compensation for value for the benefit of use of a loan is to be paid, it can be shown that the value of the benefit of use was lower.The duty to compensate for the value does not apply: if the defect justifying revocation only became apparent during processing or transformation of the object; to the extent that the oblige is responsible for the deterioration or destruction or that the damage would also have occurred if the object had remained with the obligee. Any remaining enrichment must be returned.If the obligor fails to take emoluments contrary to the rules of proper management although he could have done so, then he is obliged to compensate the oblige for the value. In the case of a statutory right of revocation, the person entitled must in regard to emoluments be responsible only for the case that he customarily exercises in his own affairs.If the obligor returns the object or gives compensation for the value or if his duty to compensate for value, he must be reimbursed for his necessary outlays. Others expenses are to be reimburses to the extent that the oblige is enriched by them. The obligee may demand damages in the case of revocation of reciprocal contract.The duties of the parties arising from revocation are to be performed reciprocally and simultaneously. The provisions of “defence of unperformed contract” apply with the necessary modifications.There are two kinds of risks. Risks in the Obligation and risks out of the obligation. Only in the system of “ Principle of fault” play the rules of risks an important role.For the application of Article 148 of Chinese contract law, there are two kinds of performance: performance with known defects and performance with unknown defects. For performance with known defects, when the buyer does not even receive the goods or receive but not accept the goods, bears the seller the risks of loss. For performance with unknown defects, goes the risks back to the seller as revocation of the contract.For the risks in Article 148 is an wider interpretation also considerable. It can be this situation: the goods perish because of the slight negligence of the buyer. The buyer(the obligor) has in case of statutory revocation show the care that he customarily exercises in his own affairs.