On The Liability For Breach Of Reservation Contract

A reservation contract is a contract under which the parties agree to conclude this agreement in the future.With the rapid improvement of economic development,the traditional form of "offer-acceptance" contracting gradually cannot meet the needs of the changeable trading market,because the conclusion of a contract through an offer and commitment is sometimes a negotiation process with multiple round-trips,with a long cycle and cannot realize the transaction in the most favorable time period.At this time,as a new trading method,the reservation contract can improve the efficiency of market transactions and maximize the interests of the parties to the transaction,but at the same time,it will inevitably bring a large number of disputes.Although the development of reservation contracts in China first began in the field of commercial housing sales,it was not laws and regulations that first regulated them,but the Interpretation of the Supreme People’s Court on Issues Concerning the Application of Law in the Trial of Sales Contract Dispute Cases issued in 2012,which means that the reservation contract is restricted only in the field of sales and purchase.It was not until the Civil Code of the People’s Republic of China(hereinafter referred to as the "Civil Code")that the independent legal value of the reservation contract was first determined in the form of law,but the content of its provisions almost inherited the specific provisions of the Judicial Interpretation of the Sales Contract,and there was not much change,even if the reservation can be applied to all contract fields,but its existing problems have not been solved.The main core of reservation contract disputes is that the application of liability for breach of contract has not formed a unified standard,and it is difficult to remedy the legitimate rights and interests of the parties,so this article will focus on this discussion,and through the combing and research of relevant issues,in order to benefit the remedy for breach of contract in the reservation contract and provide assistance for judicial adjudication activities.In addition to the introduction and conclusion,this article includes the following four parts:The first part is to sort out the basic theory of reservation contracts.The meaning of the reservation contract has basically been concluded,and with the confirmation of its independent status,it shows that the reservation contract not only has the general attributes of the contract,but also has unique legal characteristics.However,it is currently impossible to visually distinguish between the reservation contract and the contract of this contract,so this article classifies the two: First,the reservation contract is not an offer and acceptance of the formation of this contract,it is not a subordinate contract of this contract,and the two are independent types of contracts.Second,the content of the reservation contract does not necessarily need to involve the specific rights and obligations of the parties,and it is sufficient to stipulate the future signing of this agreement,and this contract must clearly stipulate the rights and obligations relationship to ensure the smooth realization of the transaction.Third,after the conclusion of this contract,it will inevitably be compulsorily binding on the parties,and both parties must perform their obligations and assume responsibilities in accordance with the content of the contract,and it is still controversial what kind of contractual binding force the reservation contract has on the parties,and it is uncertain whether it can ultimately lead to the conclusion of this agreement.Fourth,the subject matter of performance is not the same.This contract requires the delivery of specific subject matter,such as real estate,equity,etc.,and the performance of the reservation contract lies in the more abstract positive act of signing this contract.The second part is an analysis of the determination of the reservation contract.The determination of a reservation contract is the basic condition for determining the liability for breach of contract,and only by first recognizing the dispute agreement as a reservation contract can the liability of the breaching party be determined.Therefore,this paper mainly analyzes the two controversial viewpoints of determining the content of the contract and the party’s sincere determination from the perspectives of practice and academia,and finally forms the determination standard of "the party’s sincere intention is the main and the contract content is supplemented".In addition,based on the completeness of the contract content,this article divides the reservation contract into three different types,namely simple reservation contract,typical reservation contract and complete reservation contract.The third part examines the ways in which liability for breach of the reservation contract is assumed.First of all,determining what kind of contractual binding force the reservation contract has on the parties is crucial to resolving the reservation dispute,and this issue is still in dispute,this article mainly analyzes the three theories of good faith consultation,should be contracted,and content decision.On the basis of the tendency to determine the content,combined with different types of reservation contracts,this paper specifically determines that simple reservation contracts adopt the good-faith negotiation theory,while typical reservation contracts and complete reservation contracts adopt the theory of contracting.Secondly,there is a debate as to whether continued performance can be applied in the reservation contract,mainly from three views: affirmative,negative and content distinction.Through the analysis of different points of view,this article prefers the application of the content distinction theory in the reservation contract,and determines whether it is applicable to continued performance according to the different completeness of the content.Finally,damages could,of course,be used as a form of remedy for breach of contract in a reservation contract,but the debate was as to determine the scope of compensation,with some views that compensation for reliance interests alone should be sufficient,while others were also of the view that the interest in performance should be included.Based on the analysis of different views,this article believes that it should not be generalized,but should be specifically determined in conjunction with the content of the reservation contract,and the scope of compensation should be determined according to the completeness of the content.The fourth part is a recommendation on the application of liability for breach of the reservation contract.By typifying the reservation contract and giving the corresponding legal binding force to the different reservation contract,the scope of damages can be determined accordingly.Specifically,in a simple reservation contract,because it only has the effect of negotiating in good faith on the parties,it is impossible to compel the parties to continue to perform the contract,and the scope of damages can only be limited to the loss of reliance interests.In a typical reservation contract,if the breach of contract is caused by objective obstacles,continued performance can of course be applied;If it is due to subjective obstacles,then continued performance loses the basis of the right to claim.The scope of damages includes not only loss of reliance but also loss of performance interest.In a complete reservation contract,its content is complete,and continued performance must be used as a form of relief,and the scope of compensation should also cover the loss of performance benefits.