Research On The Rescission System Of Continuous Contracts

When the legislators formulated the Contract Law of the People’s Republic of China(hereinafter referred to as the Contract Law),they did not make a strict legal distinction between the discrete contract and the continuous contract.The legislators mainly set up the termination system of the contract according to the characteristic of the discrete contract.With the expansion of the use of continuous contracts,the disadvantages of the Contract Law not paying enough attention to the particularity of continuing contracts are becoming increasingly prominent.The judges and scholars have realized that the termination system applicable to discrete contracts cannot be perfectly applied to continuous contracts,and they must be treated differently.The newly issued Civil Code of the People’s Republic of China(hereinafter referred to as the Civil Code)has a new understanding of the continuous contract,and has made relevant provisions on the termination of the continuous contract in Article 563 and some chapters of typical contracts,which is a great progress in the termination system of the continuous contract.However,in the face of the deadlock of continuous contracts,the current law still has some deficiencies.Firstly,the scholars has not made a detailed distinction between the two different concepts of "the right of arbitrary rescission" and "the right to terminate anytime".The right of arbitrary rescission is a breakthrough in the strict observance of the principle of the contract,and it is a reason to get rid of the shackles of the contract,but it needs to compensate for the damage.The right to terminate anytime is a statutory way of terminating continuous contract of indefinite duration without the liability for damages,but the other party shall be notified before a reasonable time limit.Compared with the right of arbitrary rescission,the right to terminate anytime is subject to certain restrictions.Secondly,there are no perfect provisions on the retrospective effect after the termination of the contract and the related issues of compensation for damages,which leads to the problem of "different judgments of the same cases" when judges judge related cases.It may affect the impartiality of judicial adjudication.Finally,China does not stipulate the right to terminate by major causes.The system of termination of continuous contract based on major causes in German law,the system of termination of contract based on "unjustified" causes in Japanese law and “the doctrine of breach of trust relationship”developed by Japanese academic circles are all important reflections and practices of the right to terminate by major causes,and provide a new idea for resolving the contract deadlock.Therefore,under the framework of the current law,China needs to distinguish the right of arbitrary rescission from the right to terminate anytime,so as to ensure that the limitation,effect and scope of the exercise of the right are clear.At the same time,China should also draw lessons from the provisions of Germany and Japan to set up the right of termination of major causes,clarify the relationship between tthe right to terminate by major causes and Article 533,Article 563 and Article 580 of the Civil Code,and put the right of termination of major causes on the yokes of procedure,so as to achieve the purpose of standard exercise.Through the joint effort of the right of arbitrary rescission,the right to terminate anytime and the right to terminate by major causes,the purpose of reasonable termination of the continuous contract will be finally realized.