There are two types of contract cancellation: agreement cancellation and legal cancellation. Article 93 of the Contract Law stipulates that the parties may agree on the conditions for the party to terminate the contract. When the conditions for the termination of the contract are fulfilled, the right holder can cancel the contract. Then, when the cancellation conditions agreed in the contract are completed, can the contract be lifted? The answer is NO. When the conditions for the cancellation of the contract meet the statutory dissolution, the observant party will enjoy the right to cancel the contract.
Case index:
Supreme People's Court (2013) Min Ti Zi No. 202 Civil Judgment
The Supreme People's Court's Judgment: Donggang Company was required to terminate the contract on the grounds that Xinghe Company delayed payment of rent for 2 days and 5 days, which was too harsh for Xinghe Company. According to Article 5 of the Contract Law, “Parties shall follow the principle of fairness to determine the rights and obligations of the parties”, the request of Donggang Company to request the termination of the lease contract on the grounds of late payment of rent cannot be established.
Basic case:
The "Lease Contract" signed by Xinghe Company and Donggang Company stipulates that Xinghe Company will not pay the rent according to the time and amount stipulated in the contract, which constitutes a breach of contract. Donggang Company has the right to unilaterally announce the termination of the contract. The rents paid by Xinghe Company on May 11, 2011 and November 11, 2011 will be actually paid on May 13, 2011 and November 16, 2011, respectively, which constitutes delayed performance. Donggang Company requested that the "Lease Contract" signed by both parties be lifted.
The court of first instance held that:
Although Xinghe Company has certain flaws in paying the above two rents, the lease contract period is longer based on the lease contract involved, and the total contract fulfillment amount is larger, and the overdue period is within a few days. Donggang Company actually has two periods. The rent was also accepted. Therefore, the Donggang Company counterclaimed that Xinghe Company had overdue the payment of rent, demanded that the lease contract involved in the case be dismissed and the claim for breach of contract should be investigated. The reasons were insufficient and no support was given.
The court of second instance held that:
Although according to Article 93 of the Contract Law, “the parties may agree to cancel the contract. The parties may agree on the conditions for the party to terminate the contract. When the conditions for the termination of the contract are completed, the right of the right to terminate the contract”, the contract agreed by the parties When the conditional achievement is lifted, the right holder can cancel the contract. However, according to Article 227 of the Contract Law, “If the lessee fails to pay or delays the payment of the rent without justifiable reasons, the lessor may require the lessee to pay within a reasonable period of time. If the lessee fails to pay within the time limit, the lessor may In order to terminate the contract, Donggang Company should first send a notice of rent to Xinghe Company. If Xinghe Company fails to pay within a reasonable period of time, Donggang Company can cancel the contract. Although Xinghe Company paid the rent late, but after all, it has actually paid, Donggang Company also accepted it. Therefore, Donggang Company requested to cancel the lease contract and pursue the company’s liability for breach of contract on the grounds of overdue rent payment. stand by.
The retrial court held that:
Xinghe Company has actually paid in the case of uncollected payment, and the deferred payment time is short. In particular, the lease contract signed by the two parties has a lease term of 10 years. Donggang Company delayed the payment of rent by 2 days and 5 days. The request to terminate the contract is too harsh for Xinghe. According to the provisions of Article 5 of the Contract Law, “Parties shall follow the principle of fairness to determine the rights and obligations of the parties”, the court of second instance found that the request of Donggang Company to terminate the lease contract on the grounds of late payment of rent was not established and was not improper.
Lawyer's comment:
In this case, the “Lease Contract” signed by Xinghe Company and Donggang Company stipulated that Xinghe Company did not pay rent according to the time and amount stipulated in the contract, which constituted a breach of contract. Donggang Company has the right to unilaterally announce the termination of the contract. Article 94 of the Contract Law also clearly stipulates the conditions for the termination of the contract at the time of the breach of contract by one of the parties: before the expiration of the performance period, one of the parties expressly expresses or fails to perform the main debt by their own actions; After the reminder, it has not been fulfilled within a reasonable period of time; the party’s delay in performance of the debt or other breach of contract may result in the inability to achieve the contract. The conditions for cancellation as stipulated in the Lease Contract have adjusted the statutory delay in the performance of the statutory delay, and canceled the obligation of the Donggang Company. Donggang Company has the right to terminate the rights, resulting in an imbalance of rights and obligations, and deprivation of the statutory cancellation. The right to take remedial measures in a reasonable period of time after the other party’s request to prevent the occurrence of the statutory right of rescission is ultimately not supported by the court.
Therefore, the author believes that if the contract stipulates that the breach of contract is the condition for the termination of the contract, the condition cannot exclude the conditions for the statutory cancellation. That is to say, the contracting party has the right to cancel the contract only when the conditions for the cancellation are met and the statutory cancellation is met.
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