| Traditional academic theories hold that the defaulting party has no right to terminate the contract,but there are an increasing number of judgments in favor of the defaulting party to terminate the contract,and scholars have great differences on this issue.Based on practical experience and theoretical controversies,to resolve the contractual deadlock,the defaulting party’s right to terminate the contract under specific circumstances is established in paragraph 2 of article 580 of the Civil Code.The defaulting party’s right to terminate the contract is conducive to resolving the contractual deadlock,balancing the interests of the parties,and promoting the use of resources.However,the dissolution of the binding effect of a contract is a violation of the principle of strict compliance with the contract,and the phenomenon of improper expansion of the application of the rule of contractual termination by the defaulting party is widespread in judicial practice.At the same time,the unclear connotation of contractual deadlock and the unclear application elements of the rule of contractual termination by the defaulting party also increase the risk of abuse of this rule.Therefore,it is necessary to clarify the applicable boundary of the rule of contractual termination by the defaulting party.To determine the applicable boundary of the rule of contractual termination by the defaulting party,the situations in which the rule of contractual termination by the defaulting party is excluded should be clarified.Firstly,when the defaulting party’s performance is impossible,the non-defaulting party refuses to terminate the contract but chooses to request the defaulting party to bear the liability of compensation for damages in lieu of payment or to exercise the replacement claim right of compensation.There is no contractual deadlock in this situation,it is legitimate for the non-defaulting party to exercise these rights,so the rule of contractual termination by the defaulting party should be excluded.Secondly,if the facts of the case satisfy the rule of the circumstances changes or the application of the rule of objection out of hindrance of performance can resolve disputes,the rule of contractual termination by the defaulting party has no room for application.Finally,according to paragraph 2 of article 580 of the Civil Code,the rule of contractual termination by the defaulting party cannot be applied in the case of the contractual deadlock caused by monetary debt.Paragraph 2 of article 580 of the Civil Code is a binding norm on the defaulting party’s right to terminate the contract.It should be understood and applied in combination with the legislative purpose of resolving the contractual deadlock and the positioning of the normative system for the termination of the contract,and the prohibition conditions and necessary conditions of the defaulting party’s right to terminate the contract should be clarified,so as to delimit the applicable boundary of the rule of contractual termination by the defaulting party.After the debtor breaches the non-monetary debt,if the exceptions of actual performance occur,based on the demand of the defaulting party to request the return of the completed part when the unfulfilled part cannot be actually performed,or based on the demand of the defaulting party to withdraw from the bondage of the contract when the trust relationship is broken,the defaulting party’s right to terminate the contract should be granted.Especially it is of practical significance to give the defaulting party the right to terminate the contract when the subject of the debt is not suitable for compulsory performance or the cost of performance is too high.It can effectively resolve the contractual deadlock in the disputes of the sale and management contract of property-type shops,the cooperation agreement,and the performance brokerage contract.In addition,the defaulting party is not a malicious breach of contract and the purpose of the contract cannot be achieved are also essential elements of the defaulting party’s right to terminate the contract.In terms of procedural requirements,the law designs the defaulting party’s right to terminate the contract as the suit right of formation so as to further control the application of the rule through the review procedure of the court or the arbitration institution. |
