Issued "Opinions on the Trial of Civil and Commercial Contract Disputes under the Current Situation"

Notice on Guiding Opinions on Several Issues

Fa Zheng Fa [2009] No.40

Higher People's Courts of all provinces, autonomous regions and municipalities directly under the Central Government, Military Courts of the People's Liberation Army, and Production and Construction Corps Branch of the Higher People's Court of Xinjiang Uygur Autonomous Region:

The "Guiding Opinions of the Supreme People's Court on Several Issues Concerning the Trial of Civil and Commercial Contract Disputes under the Current Situation" are hereby printed and distributed to you, please conscientiously implement them in light of local conditions.

July 7(th), 2009

the Supreme People's Court

Trial of civil and commercial contract disputes under the new situation

Guiding opinions on several issues

At present, the contradictions and disputes caused by the spread of the global financial crisis have been clearly reflected in the judicial field, and civil and commercial cases, especially civil and commercial contract disputes related to business operations, have surged; At the same time, due to the changes in the macroeconomic situation, many new trial practice problems have emerged. Focusing on the national economic development strategy and the requirements of "ensuring growth, people's livelihood and stability", the people's courts adhere to the guiding principle of "based on the overall situation of the trial, helping each other in the same boat, and * * * tackling difficulties", firmly establish the concept of serving the overall situation and serving the people's justice, seriously study and solve these universal and key problems closely related to the changes in the macroeconomic situation in civil and commercial trial practice in time, and effectively resolve contradictions and disputes. It is not only an important task for the civil and commercial judicial departments to deal with the financial crisis, but also of great significance for maintaining the honest market transaction order, ensuring a fair and legal investment environment, just solving disputes and boosting market confidence. The following opinions are put forward on some issues concerning the trial of civil and commercial contract disputes by the people's courts under the current situation.

1. Carefully apply the principle of changed circumstances and rationally adjust the interests of both parties.

1. At present, due to many factors, such as drastic fluctuations in raw material prices, changes in market demand relations, and insufficient liquidity, there are a large number of disputes between market participants in product trading and capital circulation. If some parties apply the principle of changed circumstances to request to change or terminate the contract in litigation, the people's court shall strictly examine it according to the principle of fairness and changed circumstances.

2. When applying the principle of changed circumstances, the people's courts should pay full attention to the fact that the global financial crisis and the changes in the domestic macroeconomic situation are not entirely a sudden change process that makes all market participants unprepared, but a gradual evolution process. In the process of evolution, market subjects should have a certain degree of foresight and judgment on market risks. The people's court should grasp the applicable conditions of the principle of changed circumstances according to law, strictly examine the "unforeseeable" claims put forward by the parties, and apply the principle of changed circumstances more cautiously to contracts involving the subject matter of bulk commodities such as oil, coke and non-ferrous metals and the subject matter of venture capital financial products such as stocks and futures.

3. The people's court shall reasonably distinguish between changed circumstances and commercial risks. Commercial risks are inherent risks in commercial activities, such as changes in supply and demand, price fluctuations, etc. The change of circumstances is the inherent risk of non-market system that the parties cannot foresee when signing the contract. When judging whether a major objective change belongs to a change of circumstances, the people's court should pay attention to such factors as whether the type of risk is unpredictable in advance in the general concept of society, whether the degree of risk far exceeds the reasonable expectation of normal people, whether the risk can be prevented and controlled, whether the nature of the transaction belongs to the usual range of "high risk and high return", and determine the change of circumstances and commercial risks in the case in combination with the specific conditions of the market.

4. The people's court should still follow the principle of focusing on protecting the observant party when grasping the value orientation of the adjustment scale. The application of the principle of changed circumstances is not simply to exempt the debtor from the obligation and let the creditor bear the adverse consequences, but to pay full attention to the balance of interests and adjust the interests of both parties fairly and reasonably. In the course of litigation, the people's court should actively guide the parties to renegotiate and amend the contract; If the negotiation fails again, try to settle it through mediation. In order to prevent the abuse of the principle of changed circumstances and affect the normal trading order of the market, if the people's court decides to make a judgment by applying the principle of changed circumstances, it shall strictly perform the relevant review procedures for applying the principle of changed circumstances in accordance with the requirements of the Supreme People's Court's Notice on Correctly Applying the Contract Law of People's Republic of China (PRC) (II) to Serve the Overall Work of the Party and the State (Law [2009]165).

Second, adjust the amount of liquidated damages reasonably according to law and solve the problem of liability for breach of contract fairly.

5. At this stage, due to the change and influence of domestic macroeconomic environment, the breach of contract in the performance of civil and commercial contracts is more prominent. For the liquidated damages or extremely punitive liquidated damages clauses agreed by both parties in the contract, the people's court shall reasonably adjust the amount of liquidated damages according to the content and spirit of Paragraph 2 of Article 114 of the Contract Law and Article 29 of the Supreme People's Court's Interpretation on Several Issues Concerning the Application of the Contract Law of People's Republic of China (PRC) (hereinafter referred to as Interpretation of the Contract Law (II)), so as to fairly solve the problem of liability for breach of contract.

6. Under the current difficult operating conditions, if the amount of liquidated damages is excessively higher than the losses caused by breach of contract, we should adhere to the principles of good faith and fairness stipulated in the contract law, adhere to the nature of compensatory liquidated damages, supplemented by punitive liquidated damages, and reasonably adjust the discretion range to effectively prevent the parties from completely letting the parties agree on excessive liquidated damages on the grounds of autonomy of will.

7. When the people's court adjusts the excess liquidated damages according to the second paragraph of Article 114 of the Contract Law, it should comprehensively weigh the degree of contract performance, the fault of the parties, the expected interests, the strength of the contracting status of the parties and whether the standard contract or terms are applicable, based on the principles of fairness and good faith, so as to avoid simply adopting a "one size fits all" approach such as a fixed proportion and prevent the possible substantive unfairness caused by mechanical justice.

8. In order to reduce the litigation burden of the parties and properly resolve the dispute over liquidated damages, the breaching party raises an exemption defense on the grounds that the contract is not established, the contract is not effective, the contract is invalid or does not constitute a breach of contract, and fails to make a request for adjusting liquidated damages, the people's court may explain whether the parties need to claim that the liquidated damages are too high. The people's court shall correctly determine the burden of proof. For the claim that the liquidated damages are too high, the breaching party shall bear the burden of proof. If the observant party claims that the liquidated damages are reasonable, it shall also provide corresponding evidence. After the termination of the contract, if the parties claim that the liquidated damages clause will remain valid, the people's court may handle it in accordance with the provisions of Article 98 of the Contract Law.

Third, distinguish the types of loss of available benefits and correctly identify the loss of available benefits.

9. At present, the breach of contract by market participants is more prominent, which usually leads to the loss of available benefits. According to the nature of the transaction, the purpose of the contract and other factors, the loss of available benefits is mainly divided into production profit loss, operating profit loss and resale profit loss. In the breach of the contract for the sale of production equipment and raw materials, the loss of the buyer's available benefits caused by the seller's breach of contract usually belongs to the loss of production profits. In contract management, lease management contracts and contracts for providing labor services or services, the loss of available benefits caused by one party's breach of contract usually belongs to the loss of operating profit. In a continuous sales contract, the loss of the seller's profit in the subsequent resale contract caused by the seller's violation of the original contract usually belongs to the loss of resale profit.

10. When calculating and determining the loss of available benefits, the people's court shall comprehensively apply the predictability rule, impairment rule, profit and loss offset rule and fault offset rule, and deduct the unforeseeable loss of the breaching party, the loss of improper expansion of the breaching party, the loss obtained by the breaching party due to breach of contract, the loss caused by the fault of the observant party and the necessary transaction costs from the total compensation for available benefits claimed by the observant party. If the fraudulent operation stipulated in the second paragraph of Article 113 of the Contract Law and the calculation method of damages agreed by the parties stipulated in the first paragraph of Article 114 of the Contract Law cause personal injury or mental damage due to breach of contract, it is not suitable to apply the compensation rules for the loss of available benefits.

1 1, the people's court shall reasonably allocate the burden of proof when determining the loss of available benefits. Generally, the breaching party should bear the burden of proof to prove that the observant party failed to take reasonable measures to reduce losses, and the observant party benefited from the breach of contract, and the observant party was also at fault; The non-breaching party shall bear the burden of proof for all losses of available benefits and necessary transaction costs. For foreseeable losses, both the non-breaching party can provide evidence and the people's court can handle them as appropriate according to the specific circumstances.

Four, correctly grasp the legal elements, and safely identify the agency by estoppel.

12. At present, in major national projects, contracting and leasing industries and other industries that are obviously affected by the global financial crisis and changes in the domestic macroeconomic situation, due to the subcontracting, subcontracting and subletting methods adopted by the contracting parties, a large number of contracts are signed or actually performed in the name of unit departments, project managers and even individuals, which leads to obvious agency disputes due to the problems of contract subject and validity determination. In this regard, the people's court should correctly apply the provisions of Article 49 of the Contract Law on agency by estoppel, and strictly identify agency by estoppel.

13. The agency by estoppel system stipulated in Article 49 of the Contract Law not only requires the agent's unauthorized agency behavior to objectively form the appearance of agency, but also requires the counterpart to subjectively believe that the actor has obtained the agency in good faith. If the counterpart of the contract claims to constitute an agency by estoppel, it should bear the burden of proof, which means that there are objective formal elements such as contract, official seal and seal in the agency behavior, and that it is in good faith and that the actor has the agency right without losing the basis.

14. When the people's court judges whether the counterpart of the contract is in good faith subjectively and without fault, it should comprehensively judge whether the counterpart of the contract has fulfilled the obligation of reasonable care in combination with various factors in the process of contract conclusion and performance. In addition, we should also consider the time when the contract was concluded, in whose name it was signed, whether it was stamped with the relevant seal and whether it was true or false, the delivery method and place of the subject matter, the materials purchased, the leased equipment, the purpose of the loan, and whether the construction unit knew the behavior of the project manager.

Five, the correct application of mandatory provisions, and steadily determine the effectiveness of civil and commercial contracts.

15. Correctly understanding, identifying and applying the "mandatory provisions against laws and administrative regulations" in Item (5) of Article 52 of the Contract Law is related to the maintenance of the effectiveness of civil and commercial contracts and the security and stability of market transactions. The people's court shall, according to the provisions of Article 14 of the Interpretation of Contract Law (II), pay attention to the distinction between the effective mandatory clauses and the administrative mandatory clauses. In violation of mandatory provisions, the people's court shall consider the contract invalid; Violation of administrative compulsory provisions, the people's court shall determine its effectiveness according to the specific circumstances.

16. The people's court shall, in combination with the intention of laws and regulations, weigh the conflicting rights and interests such as the type of rights and interests, transaction security and the object of adjustment, and comprehensively identify the types of mandatory clauses. If the mandatory norms regulate the contract behavior itself, that is, as long as the contract behavior occurs, it will definitely harm the national or social public interests, and the people's court shall consider the contract invalid. If the mandatory provisions regulate the "market access" qualification of the parties rather than a certain type of contract behavior, or regulate the performance of a certain type of contract rather than a certain type of contract behavior, the people's court shall carefully grasp the determination of the effectiveness of such contracts and, if necessary, seek the opinions of the relevant legislative departments or the people's courts at higher levels.

Six, the reasonable application of the right of defense rules, safeguard the legitimate rights and interests of the obligee.

17. Under the current circumstances, in order to urge one party to a bona fide contract to preserve the evidence in time and effectively protect the legitimate rights and interests of the obligee, if one party has fulfilled all the delivery obligations, but the agreed price period has not expired, but it claims to pay the unexpired price to the payer, and there is definite evidence to prove that the payer explicitly refuses to perform the price obligation, or the business license of the payer is revoked, cancelled or revoked by the relevant department, Or in a state of suspension of business, or the payer transfers property or withdraws funds to escape debts, or the payer loses its commercial reputation, and the payer shows that it fails to perform the price obligation, and the payer fails to provide appropriate guarantee, the people's court may, in accordance with the provisions of Article 68, paragraph 1, Article 69, Article 94, paragraph 2 and Article 108 of the Contract Law.