The Study On The Judicial Termination Of Contract By The Defaulting Party

The request for judicial termination by the defaulting party originates from judicial practice and aims to find a way to solve the contract deadlock.It is an exceptional case of contract termination and has specific and strict application conditions and procedures.Whether in academia or practice,the dispute that the contract requests judicial discharge has a long time.Therefore,it is necessary to explore the theory of the judicial termination of contract by the defaulting party.The introduction briefly explains the significance and purpose of the research on the request for judicial termination contract by the defaulting party,comprehensively applies the methods of empirical analysis,historical analysis and normative analysis,and sorts out the main views of the current literature on the request for judicial termination contract by the defaulting party.Chapter one,the theory dispute of the party in the defaulting party’s request for judicial termination.The "Xinyu" case published in the Gazette of the Supreme People’s Court in 2006 challenged the traditional idea that only the party who keeps the contract has the right to terminate the contract.Subsequently,in the judicial practice,not only a large number of referential rules of the case were invoked,but also the judicial termination of the defaulting party was written into the Civil Code in the legislative.This makes the defaulting party’s request for judicial termination recognized by law.In spite of this,academic circles have been divided on whether the defaulting party has the right to request judicial termination.The "negation theory" is not convincing on the grounds that it causes moral hazard,undermines the strict principle of contract and is not in line with fairness and justice.It is reasonable and feasible for the defaulting party to request judicial termination.Firstly,it conforms to the termination value norm from the functional orientation.Secondly,according to the hypothesis of economic man,incomplete contract and efficiency breach,the efficiency value of contract is agreed.Finally,the infeasibility of continuing to perform and the substitution of damages fully prove that the defaulting party of contract requests judicial termination in line with the theory of relief for breach of contract.The second chapter is an empirical study on the defaulting party’s request for judicial termination.The cases are widely distributed and increasing year by year in China,and most of them involve the types of lease contracts and housing sales contracts.It can be seen from the empirical study that Court from dissolve the contract deadlock,with Contract Law article 110 and article 580 of the Civil Code as the main legal basis,study the contract purpose can’t achieve,is not fit for compulsory execution or performance of the high cost of objective conditions,to balance the interests between parties,avoid the waste of social resources,to support such a defaulting party judicial terminate the contract.The third chapter,the application analysis of the defaulting party’s request for judicial termination.In the contract deadlock,there are strict application conditions for the defaulting party to request judicial termination: first,the object condition,the contract performance is in the situation of "cannot be performed","the contract is not suitable for compulsory performance" or "the performance cost is too high";The second is the subject condition,the defaulting party is not subjectively malicious,the observant party does not terminate the contract is obviously unfair;Third,the procedural conditions,the defaulting party to the court or arbitration institution to apply for judicial termination.The moral hazard caused by opportunistic behavior is avoided by the restriction on the contract relief of the defaulting party,and the transaction security and the market economy order are effectively guaranteed.Chapter four,The legal effect of the defaulting party’s request for judicial rescission.The legal consequences of the defaulting party’s request for judicial termination of the contract include two parts which are contract rescission and damage compensation.The termination time of the contract is different from the agreed termination and legal termination.The observant party shall take into account the need for full compensation,and the termination time shall not be taken as the occurrence of deadlock or the service of notice.The scope of compensation for breach of contract stipulated by "actual loss" and "available benefit" is not in line with the balance of interests and fairness principle of judicial termination of the defaulting party.The limit of available benefit should be considered objectively and fairly,and the compensation formula should be calculated reasonably.Chapter five,the interpretation path of the defaulting party’s request for judicial termination in the Civil Code.Article 94 of the Contract Law and Article 26 of the Judicial Interpretation(II)of the Contract Law because the subject of the rescission right is the observant party,it cannot be used as the interpretation path for the defaulting party to request judicial termination.Article 110 of the Contract Law can only be used as a defense of failure to perform,and it does not explicitly apply for the termination of the contract.It was not until the promulgation of the Civil Code that Article 580,paragraph 2,granted the parties to request judicial termination of the contract,which finally became the interpretation path to get through the judicial termination of the defaulting party,made up the legislative loopholes,and became the legal support to break the contract deadlock.The last part is the conclusion,which briefly summarizes the core argument of this paper.