The Legal Effect Of Contract Rescission

Under the provisions of article 97 of the Contract Law, whether the effect of contract rescission has retroactive effect there is no clear position. In theory, there are differences in the views of the problem. Through the analysis and comparison of the two kinds of paths, we can explain the reasonable rules of the contract rescission. Based on the analysis of the judicial practice, this paper analyzes these aspects: retroactive effect of contract rescission, recover of original property, value substitute,damages for breach of contract, plea of simultaneous performance, guarantee and the application of penalty.In order to have a clear illustrate of the core problem this article discussed, this paper will component by four chapters besides the introduction.The first chapter discusses the retroactivity of contract rescission, divided into three sections. The first section defines the concept of restitution and liability in restitution. The retroactive effect refers to the retroactive elimination of the contract relationship, the part of contract that has been fulfilled should be returned. However, no retroactive effect rule, just did not make the relation of the contract relationship immediately retroactive elimination. On the basis of contractual relationship continues to exist, the original payment obligation to update for the liability in restitution. Only after the performance of liability in restitution, the contract relationship does not exist. The occurrence of obligations may be in accordance with the provisions of the law, but also can be based on unilateral legal acts. Just under different interpretation path, to discusses how to achieve the rule of restitution which is include restitution of physical form and restitution of value substitute. The second and third section introduces the theory and legislation of the validity of the contract rescission. Although there are differences in the rules, we can conclude some common trends, which can be used as a reference for our country’s rules.The second chapter analyzes one kind of liability in restitution that is recover of original property. The first section analyzes the typical cases. Second section analysis theory debate about recover of original property. The original property effect of recover of original property after rescission of the contract shall be limited. Although bona fide acquisition rules cannot be applied to against malicious third person, under the premise of satisfying the requirements, recover of original property right holder can exercise the creditor’s right of rescission, or can also claim that the addressee and third malicious collusion of infringing creditor’s rights.The third chapter analyzes another kind of liability in restitution that is value substitute. The first section discusses the scope of value substitute, to determine the total return principle, and certainly common interpretation of the two path. The second section discusses the conflict between the risk burden and contract rescission. Through the analysis, it is found that, if according to the rules of risk burden, under the premise of the subject matter is not defective, the burden of the risk should be borne by the actual owner. If according to the rule of contract rescission, the party with the right to fulfill the contract can claim the return of payment. On the premise of the rationality of the risk burden rules, the rules of the lifting effect are analyzed. In the third section, the calculation of value substitute is discussed. Two methods of compensation for the value of defects. When the value of the time factor decreases, risk burden rules shall be applied.The fourth chapter discusses the other validity rules of contract rescission. The first section discusses three theories of compensation for damages of contract rescission, alternative doctrine, contract rescission and compensation for interests of the trust damages coexistence principle, contract rescission and compensation for debt nonperformance damages coexistence principle. The second section and third section discusses the relationship between the right of claim for damages, the right of claim of real right, and the unjust enrichment claim, the existence of debt burden, and the application of penalty. If the amount of liquidated damages is too high, the judge should adjust the excessive part of the liquidated damages.