The Order Of Remedies In Non-conforming Sales Goods

When the sales goods is non-conforming,Chinese Contract Law allow the buyer to require the seller to repair,to replace,to reduce the price or expectation damages,etc.However,the order of exercising these rights is not expressly provided,only limited by “reasonable election”.In the view of interests balance,it should not be too harsh that the seller still has contractual interests that should be protected though he has breached.As the buyer,the seller also hope the buyer to obtain the conforming goods as soon as possible so that he could get the price of contract and prevent the possibly price declines.Based on this consideration,foreign law has established the Seller's Right to Cure so that the seller enjoys the initiative to cure the non-conforming.As there's no Seller's Right to Cure in our country,the seller's interests need to be properly protected by limiting the order of buyer's remedies when the sales goods is non-conforming.The provisions of remedies of non-conforming goods in Chinese law system are distributed in CCL Article 107,Article 111,Article 148 and Article 155.It caused liability for warrant of defects in CCL integrated with the liability of general breach of contract,as Article 155 completely cites Article 111.In consumer sales,although remedies for non-conforming in Consumer Protection Law are same as in CCL,it places “return goods” above the priority of other remedies.The types of non-conforming remedies of buyer in CCL are cure,termination,reduction price and expectation damages after the process of type merger and abstract summary.“Return goods” should be interpreted as Termination rather than Refusion to Take Delivery.Specific Performance is the same concept as Cure.The connotation of “Cure of non-conforming performance” in CCL is wider than “Specific Performance” in CCL.Refusion of acceptance in Article 148 is not the same regime as “Refusion ofAcceptance” in Common Law system.It is only a provision of burden on risk.As to the priority of cure,there are two kinds of theories in our academic circle:“No order theory” and “In order theory”.Even the theory which affirm the priority of cure mostly elaborates on the perspective of legislation.Supreme People's Court also held two diametrically opposite attitudes.In this context,it is suitable to adopt the model of new obligation law of Germany.Firstly,the standard of defective in BGB is combined by subjective and objective.Secondly,the liability for warrant of defects in BGB is the liability of breach of contract.Thirdly,the remedies of non-conforming in BGB is similar with ours.Finally,there's also no Seller's Right to Cure in BGB.On the order of cure and termination,there's no doubt that cure takes priority over termination unless the defect of goods frustrates the purpose of the contract.This is a natural explanation of Article 94(4)of the CCL and get the support of the cases.For contractual purposes,it should be based on objective goals,combined with subjective purposes to be judged.“Frustrating the purpose of the contract” is not exactly the same as “Fundamental breach”.It can be judged in the specific cases whether termination will result in grossly unconscionable.In view of the fact that our law does not stipulate the period of cure of incomplete performance,it should analogy apply the period of cure of delay in performance which stipulate in Article 94(3)of CCL.It partly because the seller's extent of default is smaller in incomplete performance when compared with the one in delay in performance.On the other hand,there is no essential difference between the incomplete performance and delay in performance to fulfill the purpose of the buyer in some cases so that analogy application is reasonable.On the order of cure and price reduction,our law lacks the two bases on which BGB takes precedence over price reduction.The one is that the right of price reduction is a right of formation.The other is that BGB expressly provides for the reduction price as an alternative remedy for termination.The nature of the right of price reduction is generally considered as a right of formation in our law.However,the right of reduction price is much the same as the right of amendment or the right of cancellation.Its structure is closer to a right of action of formation.Inaddition,price reduction has its independent value that can supplement the function of compensation for expectation damages.Therefore,there's no order between cure and price reduction under the background of CCL.On the order of cure and expectation damages,our academic and judicial opinions are not consistent.There's a judgment that use Article 112 of CCL as a basis for cure taking priority over expectation damages.However,this article regulates simple damages rather than expectation damages.Some judicial interpretations can hardly support the rules that give priority to cure in general sales contract.Therefore,cure taking priority over expectation damages in our law can be infered only from the purpose of the provision and has no clear basis of positive law.There are exceptions in priority of cure for the reason that original obligation of payment has no meaning or is excluded.It is worthless to ask for cure.In the type of the possibility of cure is excluded,there are situations of Impossibility of Performance,Anticipatory Repudiation and no effect after curing twice.The legal impossibility of performance need to be measured by whether the cost of the cure is proportional to the benefits rather simply measured whether the cost of performance is too high.In the type of which cure is meaningless,we should note the Dated Act which including Absolute Dated Act and Relatively Dated Act.They are relative with the purpose of contract.The former one may cause incomplete performance equivalent to impossibility of performance.The latter one requires specific judgment.In addition,there are some cases where the buyer fails to apply for cure within a reasonable period,makes agreement to limite the liability of defects,and applies special provisions in consumer sales,etc.In the regime of cure,there's no order between repairment and replacement.Instead,it chosed by the party with the right of options.For which party has the right to choose,both the buyer's mode and the seller's mode have their own advantages.Our academic circles have different opinions on what kind of model our law adopts.The mode of buyer's is more in line with the status quo of our law.In exercising the right of options,there has been a need to differentiate category property sales andspecific property sales traditionally.It cannot be applied by the remedy of replacement in specific property sales.However,today's theory thinks that it can be applied as long as you can find a replacement and the cost of the cure is in line with the “principle of proportionality”.Therefore,the exercise of the right to options requires judgment in specific cases.