Feasibility Analysis Of Applying Punitive Compensation System For Fraudulent Behavior In Commercial Housing Transactions

Along with the fierce development of China’s estate market,the number of transactions and the transaction volume of commercial housing are increasing day by day.At the same time,the number of disputes in commercial housing transactions is also increasing rapidly.When trading in commercial housing,the seller’s various illegal acts caused great damage to the buyer and caused widespread concern in society.At the present stage,the price of commercial housing has risen all the way,making the contract amount of commercial housing transactions larger.Whether it is the seller’s breach of contract or fraud,as long as it cannot be fulfilled in accordance with the contract,the consequences for the buyer are hard to estimate.In this regard,whether and how the buyer claims punitive damages to the developer has been a major controversy.Punitive damages first appeared in China’s Consumer Protection Law(hereinafter referred to as "Consumer Protection Law")in 1993.Since then,whether the commercial property transaction fraud can apply the "Consumer Protection Law",and Whether it is possible to obtain punitive damages,the theoretical and practical circles has been controversial and difficult to determine.The case of applying the"Consumer Protection Law" in China’s first final judgment is the case of "Li Yuping v.Henan Hebi City Overseas Chinese Construction and Installation Company’s commercial housing sales contract dispute" in Hebi City,Henan Province,The case opened the first place for punitive damages in commercial housing transactions..In 2003,the Supreme People’s Court issued the "Interpretation of Several Issues Concerning the Application of Laws in the Trial of Commercial Housing Contract Disputes"(hereinafter referred to as "Interpretation").In the judicial interpretation,when the commercial housing transaction is stipulated,the buyer’s fraudulent behavior for the seller may claim no more than twice the payment for the purchase price..After the introduction of the judicial interpretation,the handling of fraud cases in a large number of commercial housing transactions is subject to the provisions of the Interpretation,and the balance of the judicial ruling is tilted towards the application of the Interpretation as a whole.Whether the commercial housing transaction is applicable to the "Consumer Protection Law",this problem has become confusing.Through reviewing the literature,analysis cases,and comparative research methods,this paper finds that both the Consumer Protection Law and the Interpretation can solve many disputes arising from the transaction of commercial housing.However,in view of the particularity of the punitive damage theory itself,the complexity of commercial housing transactions,and the vague definition of legal concepts in China’s legislation in the "Consumer Protection Law",Leading to the dilemma of legal application in many cases arising in commercial housing transactions.There is a disagreement about the application of a specific legal system.This is just a superficial phenomenon rather than the essence of the problem.From the perspective of the form and function of law,how to use the legal system is reflected in different ideas and methods.The external expression of law is a series of conceptual terms and architecture.When the law is applied in the judicial process,as long as the ideal situation is strictly expressed in accordance with the concepts,principles and rules stipulated by the law,the ideal order society of the law will be realized.However,the legal formal language also has the characteristics of ambiguity and lag.Just by formal logic deduction to ensure the uniformity and predictability of the application of law,then a legal regulation may be derived from two different results,this will make the functions behind the law difficult to achieve.In the field of commercial housing transactions,When the law for determining fraud is applicable,if the formal analysis is used to analyze whether the commodity housing is a commodity or whether the buyer is a consumer,the conclusion that the provisions of the Consumer Law are not applicable is obtained.This kind of deduction is completely different from the original legislator’s intention to include the punitive damages system in the "Consumer Protection Law".Although the provisions in the Interpretation already cover most of the fraudulent acts of sellers that may occur in social life,other fraudulent acts carried out by developers not covered by the Interpretation are subject to fraudulent requirements.Under the premise of complying with the requirements of fraud,the "compensation penalty three" after the amendment of "Consumer Protection Law" should be applied.At the same time,in view of the lag of China’s legislation,we should ensure the uniformity of the application of the law through legal perfection,so as to promote the healthy and long-term development of China’s estate market.