Interpretation of the provisions of the Civil Code Articles 582 and 585 .

Mondo Social Updated on 2024-02-15

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Interpretation: The performance does not conform to the agreement, which is called improper performance or defective performance. That is, it did not come exactly in accordance with the requirements of the contract. For example, I asked you to weigh a pound of fruit, but you only weighed eight taels. You want you to weigh a pound of good fruit, but you seep two rotten ones. Whether it is a shortage of two catties or shoddy, it is a defect and should bear the liability for breach of contract. The Civil Code does not set up a separate warranty for defects, but regards defects as the reason for liability for breach of contract. If there is no specific agreement on how to bear the liability for breach of contract, then the consequences of the defect shall be compensated according to the usual practice. For example, if you give something bad, you will tinker with it until it can be used. If you really can't even repair it, return it. If you give two rotten fruits, you will deduct the corresponding price of these two rotten fruits. It was supposed to work for three days, but after only two days, the corresponding remuneration was reduced.

Interpretation: I didn't fulfill it, but I was persuaded and fulfilled it again; Originally, it was not properly performed, but it was later persuaded and remedial measures were taken to perform it properly. In all these cases, the process from the present to the future is itself a process of delay. If other losses are caused by the delay, such as losses such as expected benefits, term benefits, etc., the party who suffers the loss may claim compensation.

Interpretation: This article is to be read together with the previous article (Article 583). If there is non-performance or defective performance, regardless of whether there are measures to make up for it, as long as it causes losses to the other party, it must be compensated! So how to pay? What are the criteria? The standard given in this article is to cap the loss caused by the breach of contract, including expected benefits, but excluding unanticipated losses. For example, I want you to weigh a pound of fruit, and you seep two rotten ones, and I fold it back and ask you to return two rotten money, which is expected. But if I say that your two rotten fruits make my mother angry, you will have to pay for the medical expenses. This is unexpected. So what are the expected benefits? To put it bluntly, there is a certain relevance, and after you perform it properly, I will get the benefits of continuity. For example, I am engaged in decoration, I ordered a batch of decoration materials with you, and your materials are in place normally, so I can decorate normally and collect the owner's decoration money normally. But if you don't perform properly, then delay my decoration, the owner will not be satisfied, I will not be able to collect the owner's decoration money, and it will cause my decoration money loss. This kind of interest relationship is related and continuous. From the perspective of the relativity of the contract, the loss of this decoration money is not in the same legal relationship as the supply contract for the decoration materials that I asked you to order. However, it is true that because of your breach of contract in supply, which caused me to lose, this loss is the loss of expected benefits.

Interpretation: The setting of liquidated damages is not unlimited, and the upper limit is generally limited to losses. China's liquidated damages are not punitive, but only have the function of compensation for losses. Therefore, the parties can estimate the amount of liquidated damages based on the possible losses, or they can set a loss calculation formula to frame the specific amount of liability for breach of contract.

If the agreed liquidated damages are insufficient to cover the losses, the parties may request an increase in the liquidated damages to the amount of losses. If the agreed liquidated damages are too high and even twice the loss is covered, this obviously has a certain punitive nature for the breaching party, which is contrary to the nature of the liquidated damages in China, and the parties can request that the liquidated damages be reduced to the amount of losses.

If only the delay in performance only harms the interests of one party in the time limit, then after the loss of interest in this part of the time limit is compensated, performance should generally be continued. Unless the injured party's interest in the time limit is very significant, and there is no need to continue to perform even if it is compensated, the contract is terminated and compensation is claimed.

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