Lufa case [2024] 066
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During the continuous cooperation between the two companies, the defendant defended on the grounds that the statute of limitations had expired when the payment was made, and the court heard the case?
Brief facts of the case
Company A provided water treatment equipment for Company B, and the two parties signed four Sales Contracts for Reclaimed Water Treatment Equipment from 2016 to 2019, with prices of 860,000 yuan, 600,000 yuan, 460,000 yuan, and 90,000 yuan respectively. Company A successively paid a total of 1.43 million yuan. In addition, from 2018 to 2020, Company A and Company B have also signed other equipment contracts, engineering contracts, etc. Since 2020, Gao, the legal representative of Company A, has repeatedly asked Jiang, the legal representative of Company B, and Deng, a shareholder, for the arrears through WeChat, but Company B has not paid off the arrears. Now Company A has brought a lawsuit against Company B to the court, requesting that Company B be ordered to pay Company A 630,000 yuan for the equipment and construction costs and interest. Company B argued that the payment for the goods claimed in the contract involved in this case had expired. The plaintiff violated the principle of good faith by failing to fulfill the agreement reached between the two parties in the course of many years of cooperation to partially offset the payment of the goods under the contract.
Heard by the courts
The focus of the dispute in this case is: whether the claim in this case has exceeded the statute of limitations? After trial, the court held that the focus of the dispute in this case was whether the statute of limitations had expired. Company B argued that the time limit for claiming payment for goods in the contract involved in the case sued by Company A had expired. According to the available evidence, from 2016 to 2020, Company A and Company B have successively signed a number of contracts, each of which stipulates the payment amount, payment method and payment term, and during the period of signing and performing the contract between the two parties, Company B has successively paid a number of payments to Company A, of which the first note is the advance payment, and the remaining transfer is the payment for the goods or equipment, and most of the invoices issued by Company A do not note the corresponding contract or engineering project. It was also ascertained that Company A and Company B signed an Agreement on May 31, 2018, which determined the total payment of the contract previously signed by the two parties, and stated that Company A did not issue all the invoices to Company B, and agreed to continue to issue relevant invoices in the future. The agreement between the parties on matters related to the subsequent issuance of invoices also indicates that Company B has the intention to pay the subsequent contract payment. In summary, the court held that Company B's continued signing of the contract with Company A proved that the two parties had a cooperative relationship of mutual trust, and also showed that Company A had an intention to claim the arrears, and Company B also had an intention to repay the arrears, and that the two parties had a positive attitude towards achieving the purpose of the transaction and performing the content of the contract. Accordingly, the court held that the contract entered into by the parties met the characteristics of a continuous contract. Moreover, since January 20, 2020, Company A has demanded the arrears from Company B, and Company A has not passively exercised its rights. Based on the principle of maintaining transaction security and creating a good business environment, this court held that the contract signed by the two parties could not be simply recognized as a temporary contract, and the statute of limitations had not expired in this case. After accounting, Company B owed Company A RMB 630,000 for equipment and engineering. In the end, the court ordered Company B to pay Company A 630,000 yuan for the equipment and construction and interest. After the judgment was rendered, neither the plaintiff nor the defendant appealed, and the judgment has now entered into force.
What the judge said
The statute of limitations refers to the system in which the exercise of rights is hindered after the statutory period of non-exercise of rights by the right holder, and the fundamental purpose of the system is to promote the right holder to exercise its rights in a timely manner and maintain the order and security of the transaction. In this case, there were several contracts between the buyer and the seller, and the purchase price paid by the buyer could not correspond to the contracts one by one, so the determination of the statute of limitations for the several contracts involved in the case could not be viewed separately.
In practice, there is a view that the constituent elements that need to be met for a long-term continuous sales contract are: first, there is a continuous sales contract relationship for a long time, second, the purchase price is calculated on a rolling basis, and third, the buyer pays the purchase price without specifying the specific goods. In the course of the transaction that lasted for several years, the parties in this case signed a number of contracts in succession, and the buyer's payment could not correspond to the seller's supply of goods one by one, and the two parties signed an agreement to summarize and calculate the payment for the transaction between the parties. The creditor's rights and debts involved in long-term continuous trading are integral and indivisible, and in the actual transaction process, this kind of transaction is not a transaction method of "handing over money with one hand and delivering goods with one hand", but actually adopts the settlement method of "rolling payment". The feature of "rolling payment" is that the payment for several contracts signed by the two parties for a long time is calculated on a rolling basis, and when the buyer continues to pay for the goods and does not specify the specific goods, the buyer's payment behavior shall be deemed to be an admission of the payment owed in all the contracts. Therefore, when determining the statute of limitations for long-term continuous sales contracts, the entire contract should be regarded as a whole, and the limitation period shall be calculated from the date of expiration of the last period for performance.
Links to legal provisions
Article 188 of the Civil Code of the People's Republic of ChinaThe statute of limitations for filing a request to a people's court for the protection of civil rights is three years. Where the law provides otherwise, follow those provisions. The limitation period is calculated from the date on which the right holder knows or should know that the right has been damaged and the obligor. Where the law provides otherwise, follow those provisions. However, if more than 20 years have elapsed since the date on which the rights were infringed, the people's courts will not grant protection, and where there are special circumstances, the people's courts may decide to extend the rights holder on the basis of the right holder's application.
Article 577If one of the parties fails to perform its contractual obligations or the performance of its contractual obligations does not conform to the agreement, it shall bear the liability for breach of contract such as continuing to perform, taking remedial measures or compensating for losses.