The Legal Analysis Of Contract Rescission

As an important fundamental system in Contract Law, termination of contract is widely valued by legislative and judicial departments in various countries. Generally, effective contracts have legally binding force on both sides of the party concerned. Both sides must carry out their duties strictly according to contract agreement and no sides of the party have rights to cancel the contract. However, in some typical situation, due to subjective and objective changes, the law also permits persons concerned to cancel the contract. Therefore, it can make them separate from restriction of the contract. In China, Contract Law has comparatively complete and principled regulations on termination system of contract, but some unclear or less satisfied regulations lead to confusions of dealing the result of legal issues.The thesis takes case analysis method as main research method, using a classical case in termination system of contract as an example. The example is about deputing case of house sale contract in Guangxi Guiguan Electric Co. Ltd and Guangxi Yongchen Real Estate Co. Ltd. From introduction of the case and analysis of deputing highlights, based on the facts of the case with the referee to sort out, combining legal theory involved in the case were analyzed. In the part of body, the thesis firstly makes clear the connotation of contract termination and gives introduction on operational reasons of contract termination right. Moreover, it points out contract termination right contains two varieties like statutory right of termination and agreed right of termination. The thesis argues that, at the time that agreed right of termination has been completely covered by statutory right of termination, if agreed right of termination does not prohibit the law.The agreed right of termination should be used firstly, which is to follow the principle of autonomy, of course, the meaning of the contract explanation.After clearly realizing the agreed right of termination should be used firstly, we should deal with the legal consequences of termination of the contract.The purpose of termination of the contract system is balancing the interests of both parties. According to Article 97 of the Contract Law :After the termination of a contract, performance shall cease if the contract has not been performed; if the contract has been performed, a party may, in accordance with the circumstances of performance or the nature of the contract, demand the other party to restore such party to its original state or adopt other remedial measures, and such party shall have the right to demand compensation for damages. Legal consequences of termination of the contract in the Contract Law is too simple and fuzzy to apply, resulting a large number of problems in judicial practice. Whether retroactive termination of the contract as a preliminary issues, there is no specific law to regulate, in theory there are also a lot of different voices, can not be decided.This thesis agree that the contract should has retroactivity so that the contract termination can play an important role,but do not exclude the exception. Restoring original situation and compensation for damages are the most important way to relieve the interest of the party who does not violation the contract. Be clearly with the specific category,defending the fairness and justice between the parties meaningful. In order to make the purpose of the contract come true, the parties will promise their breach of contract clearly while signing the contract. However, according to the court of first and second instance verdict reason, they abandon the liability for breach of contract with the reason that legal consequences of the termination of the contract should be shown as restitution and compensation for the losses. As the huge difference between the theory and similar cases, result of the case are controversial. The author believes that the two court judgment result for damages has played a balance of interests between those two sides, and they abandon the liability for breach of contract with the reason. Rather than using the contract termination system to reject liability for breach of contract with the mode of bulletin of the Supreme People’s Court. Of course, the author thinks that the reasons for judgment is defective. When the parties have agreed on the terms of liability for breach of contract, this clause should be given to apply. This is the proper meaning of respecting the autonomy of the parties and saving the judicial resources.Therefore, the author believes that the above issues are necessary and imminent to improve. Based on the case, follow the rope of the application of the right to terminate the contract and its legal consequences, analyze the focus controversy in the case, make my suggestions to perfect the system of contract termination. My ultimate goal is realize a accurate and clear way to protect contract throw the contract termination system, and I believe only follow this way, we will protect the parties of integrity’s rights and interests, realize maximize social fairness and justice.