Article 91 of the original Contract Law stipulates that "the rights and obligations of the contract shall be terminated under any of the following circumstances: (1) the debt has been performed in accordance with the agreement; (2) Termination of the contract; (3) Debts are offset against each other; (4) The debtor deposits the subject matter in accordance with law; (5) Creditors forgive debts; (6) The creditor's rights and debts are attributed to the same person; (7) Other circumstances provided for by law or agreed upon by the parties to terminate. ", the second circumstance of rescission of the contract shall be regarded as the termination of contractual rights and obligations.
Article 557 of the Civil Code: In any of the following circumstances, the creditor's rights and debts shall be terminated: (1) the debts have been performed; (2) Debts are offset against each other; (3) The debtor deposits the subject matter in accordance with law; (4) Creditors are exempted from debts; (5) The creditor's rights and debts are attributed to the same person; (6) Other circumstances provided for by law or agreed upon by the parties. If the contract is terminated, the rights and obligations of the contract shall be terminated.
Article 557 of the Civil Code incorporates the provisions of Article 91 of the original Contract Law, but modifies the formula by listing the consequences of the termination of the contract as a separate paragraph, and at the same time amending the phrase "termination of the rights and obligations of the contract" in the first paragraph to "termination of creditor's rights and debts". So far, the Civil Code adopts the theory of contract termination in a narrow sense, distinguishing between contract termination and contract rescission.
There is a difference between a termination of a contract and a termination of a contract. The termination of the contract and the rescission of the contract are both reasons for the extinguishment of the contract's claims and debts, but the difference between the two is still obvious. After the termination of the contract, the parties shall perform the post-contractual obligations such as notification, assistance, confidentiality, and old goods in accordance with the transaction customs, and when the contract is terminated, the subordinate rights of the creditor's rights shall be extinguished at the same time, unless otherwise provided by law or otherwise agreed by the parties. The termination of the contract is the termination of the contractual rights and obligations, and the total extinguishment of the contractual rights and obligations. There are strict provisions on the time limit for exercising the right of rescission, the procedure for rescission, and the effect of rescission.
Therefore, the Civil Code distinguishes the termination of creditor's rights and debts from the termination of the overall rights and obligations of the contract, and is more rigorous and standardized in terms of logical system and terminology, which is consistent with the legislative ideas of major civil law countries.
In the practice of construction projects, after the termination of the construction contract, the law does not clearly stipulate whether the construction unit should perform the warranty obligation and whether the construction unit can withhold the relevant quality deposit, and there is still a great deal of controversy among adjudicators in various regions on this issue, and even the Supreme People's Court itself has not reached a unified consensus on this issue. The Supreme People's Court (2017) Zui Gao Fa Min Zhong No. 347 holds that the quality deposit should be returned according to the conditions agreed in the contract, rather than a one-time refund after the contract is terminated. The Supreme People's Court (2017) Zui Gao Fa Min Zhong No. 252 held that after the contract was terminated, it was impossible for the project involved in the case to meet the condition of completion, so the provisions of the contract could not be directly applied to the return of the quality deposit.
The crux of this question is to clarify what kind of legal guarantee the "quality guarantee" is. If it is considered that the quality warranty is a kind of guarantee liability, then with the termination of the main contract, the guarantor shall still bear the guarantee liability for the civil liability that the debtor should bear, unless otherwise agreed by the parties. If the quality warranty is considered to be a reserve fund related to the warranty obligation, then with the termination of the main contract, the warranty clause must be terminated due to the termination of the contract, and it is natural that the warranty money will be refunded after the contract is terminated. In fact, after the contract is terminated, the construction unit shall still bear civil liability in accordance with the requirements of the Civil Code, the Construction Law and other provisions.