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Can the ordering party demand terminationof the contract based on the general provisions of the Contract Law, citing fundamental breach of contract by the contractor? -- Answers to Several Difficult Issues Concerning Foreign-related Commercial Trials (Part Two) (5)

by the Intermediate Court of Ningbo

September 8, 2023

Answer: Article 262 of the Contract Law ofthe Republic of China stipulates: "If the work product delivered by the contractor does not meet the quality requirements, the ordering party may demand that the contractor bear the liability for breach of contract such as repair, remake, reduction of compensation, and compensation for losses." According to this article, if there are quality problems after the delivery of the work product, the ordering party may demand that the contractor bear the liability for breach of contract such as repair, remake, reduction of compensation, and compensation for losses, There is no provision that the ordering party can terminate the contract at this time. However, the prerequisite for applying this provision is that, in the case where the ordering party is still willing to continue to perform the contract, special provisions on the liability for breach of contract based on the characteristics of the contract give the ordering party special channels for breach of contract relief, but this does not exclude the application of the general provisions of the Contract Law. If the contractor's breach of contract meets the circumstances stipulated in Article 94 of the Contract Law, the ordering party has the right to choose to exercise the statutory right of termination and directly demand the termination of the contract; They also have the right to choose to continue the validity of the contract and require the contractor to bear the liability for breach of contract such as repair, rework, reduction of remuneration, and compensation for losses.