On The Duty Of Price Reduction In The Contract Law Of Chinese

Article 111 of the contract law of the People’s Republic of China clearly regards the reduction of price as the remedy for breach of contract in the case of defective performance,but there are no specific provisions on its components and how to determine the reduction amount,which leads to the confusion of relevant trial practice.Aim of this article is to clarify the theory problem first,and then discusses the practical problems —how to determine the reduction amount,and on the basis of discussion above,analyze applicable relationship between the price reduction and repair,replacement,return,and other liability in aeticle 111 for breach of contract,finally summarizes the defects of our current legislation and put forward the corresponding perfecting suggestion.The first part is mainly to analyze the nature of "price reduction" in China’s contract law."price reduction" is defined as one of the liabilities for breach of contract in China’s contract law,which is from the perspective of the debtor.From the perspective of creditors,"price reduction" is one of the remedies for breach of contract,which is embodied in the right of price reduction.As for the right to reduce price,two problems are discussed.The first is the construction basis of the right to reduce price.There is still a dispute about this problem—part release of the contract or modification of the contract.Becasue of the subject matter maybe indivisible,Therefore,the author supports the modification of the contract.The second is the nature of the right to reduce price,mainly dispute is about the nature of the right to request or the right to form,the author support the right to request,on the one hand because the simple right to form,to change the contract does not exist in China’s legislation,on the other hand the right to reduce price identified as the right to request is easier to understand,to operate and to conform to the actual practice.The second part focuses on the application of price reduction in applicable conditions,including applicable prerequisites,applicable methods and constitutive elements.Price reduction is mainly used in the sale contract,but also used to the contract of hired work,the eastate management contract,the contract of share tansfer,contract of construction projects,lease contract,and other contracts(but these contracts have a common characteristic,that is a must have money debt);The application of the reduction is premised on the creditor’s performance of the inspection notification obligation within the quality objection period;As for the applicable method of reduction,If the creditor claims that the creditor should reduce the price on the ground that the debtor has breached the contract first,it may offer a price reduction in the form of defense or counterclaim;The constitutive elements of duty reduction include the debtor’s performance incomformitting of the contract and the creditor’s acceptance of the contract.The third part is to solve the problem of how to determine the reduction amount after determining the applicable reduction liability.Based on whether the value of the performance of the defect can be obtained(that is,whether the creditor can prove the value of the performance of the defect in the litigation procedure),the determination of the reduction amount can be divided into two levels.When the value of the performance of defects can be obtained,there are two methods in practice at home and abroad: the difference method and the proportional method.When the value of the defective performance cannot be obtained,the author proposes a three-step solution: first,if both parties negotiate again to reach an agreement on the reduction amount,the amount shall prevail;Secondly,on the premise that the defects can be eliminated,the reductionamount is determined by the amount necessary to eliminate the defects.Finally,the judge decided to reduce the price as a way of undercutting.The fourth part is on the basis of the discussion on the internal application of the price reduction in the preceding chapter,and from the perspective of the external application,respectively discusses the relationship between the price reduction and the continuation of performance,termination of contract,and compensation for damages.First,the applicable relationship between the price reduction and the continued performance,the continued performance is prior.In order to realize the priority,the debtor’s right of treatment can be set up according to the provisions of CISG.Second,the applicable relationship between the reduction of price and the termination of contract is mainly reflected in how the judge should deal with the situation when the creditor claims the termination of contract and the debtor claims the reduction of price.On the entity issue,based on the requirement of reducing price and canceling contract for the severity of the defect,it is more appropriate to take whether the defect meets the fundamental breach as the applicable distinguishing standard.On procedural issues,a judge may,in accordance with his authority,make a reduction judgment on his own initiative.Thirdly,the relationship between price reduction and compensation for damages is based on the application of the right of claim.How to choose,it is necessary to discuss the quantitative relationship between the reduction amount and the amount of damages in different situations.The fifth part is the concluding chapter.Based on the discussion in the preceding chapter,it puts forward suggestions on how to improve the relevant legislation,including revising the system arrangement,clarifying the types of defects applicable to the reduction of price,determining the method of classifying the reduction amount,clarifying the relationship between the reduction and other remedies for breach of contract,and specifying the applicable procedures for reduction of price.