May 2025 is the fifth "Civil Code Promotion Month". Guanzhong Ecological actively responds to the requirements of the "Civil Code for Enterprises" activity, deeply studies and promotes the Civil Code, comprehensively improves the awareness and ability of honest and law-abiding operation, prevents and resolves risks, and protects its legitimate rights and interests in accordance with the law.
We are forwarding some relevant typical cases of the Interpretation on Several Issues Concerning the Application of the General Principles of the Civil Code of the People's Republic of China on Contracts, issued by the Supreme People's Court, for readers to learn and understand, and to effectively promote the Civil Code to the people and enter their hearts.
Case 1: Dispute over Housing Lease Contract between a Property Management Co., Ltd. and a Research Institute
[Key points of judgment]
In the bidding process, if one party fails to fulfill its obligation to enter into a written contract after the notification of winning the bid is delivered, and the other party requests confirmation that the contract is established from the time the notification of winning the bid arrives at the winning bidder, the people's court shall support it.
【 Brief Case 】
On July 8, 2021, a research institute commissioned a bidding company to publicly issue a bidding invitation for the dormitory project involved in the case. On July 28, 2021, a property management company issued a "Bid Document" to the bidding company, stating that they had no objections to the bidding documents and were willing to provide the services required by the bidding documents. On August 1, 2021, the bidding company delivered the winning bid notification to the property management company, confirming that the property management company was the winning bidder. On August 11, 2021, the research institute sent a letter to the property management company requesting the termination of the winning bid relationship with the company and no further contracts to be signed. The property management company claims that after the delivery of the winning bid notice, the legal relationship between the two parties in the lease contract is established, and the research institute should bear the losses caused by the breach of contract. The research institute argues that the two parties have not signed a formal written lease agreement, only an appointment contract relationship has been established.
【 Reason for Judgment 】
The court's effective judgment holds that from the perspective of the establishment of contractual legal relationships, the bidding behavior in the bidding process should be an invitation to bid, and the bidding behavior should be an offer. After evaluation, the act of the tenderer sending a winning notice to a specific bidder should be a commitment. After the winning notice is delivered to the bidder, the commitment becomes effective and the contract is established. Appointment contract refers to a contract that stipulates the future formation of this contract, with the main purpose of establishing this contract in the future. Article 46, Paragraph 1 of the Tendering and Bidding Law of the People's Republic of China stipulates: "The tenderer and the winning bidder shall enter into a written contract in accordance with the tender documents and the bidding documents of the winning bidder within 30 days from the date of issuance of the winning bid notification. The tenderer and the winning bidder shall not enter into any other agreements that deviate from the substantive content of the contract." From this article, it can be seen that the written contract signed after the issuance of the winning bid notification must be entered into in accordance with the tender documents. In this case, the bidding documents have clearly recorded the contents of the lease contract, so it should be considered that both parties had reached an agreement on the contents of the lease contract when the winning bid notification was received by the bidder. There is a difference between this agreement and the pre agreed agreement whose main purpose is to sign this contract, and it should be considered that the lease contract is established upon the delivery of the winning bid notification. The written contract signed after the delivery of the winning bid notice should be consistent with the bidding documents in terms of its substantive content according to the above legal provisions. Therefore, it should be a written confirmation form required by law after the establishment of the lease contract, rather than a new contract. As the legal relationship of the lease contract has been established after the delivery of the winning bid notification, the research institute shall bear the liability for breach of contract if it fails to fulfill its contractual obligations.
Judicial Interpretation Related Articles
Article 4 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the General Principles of the Contract Compilation of the Civil Code of the People's Republic of China states that if a contract is concluded through bidding and the parties request confirmation that the contract is established from the time the notification of award is received by the winning bidder, the people's court shall support it. If the parties refuse to sign a written contract after the establishment of the contract, the people's court shall determine the content of the contract based on the bidding documents, tender documents, and notification of award.
If a contract is concluded through public bidding methods such as on-site auction or online auction, and the parties request confirmation of the contract upon the auctioneer's hammer dropping and the electronic trading system confirming the transaction, the people's court shall support it. After the establishment of the contract, if the parties refuse to sign the transaction confirmation letter, the people's court shall determine the content of the contract based on the auction announcement, bidders' quotations, etc.
If institutions such as property rights exchanges host auctions and listing transactions, and their published auction notices, trading rules, and other documents publicly determine the conditions required for the formation of a contract, and the parties request confirmation that the contract is formed when these conditions are met, the people's court shall support it.
Case 2: Dispute over Sales Contract between a Stone Company and a Quarry Company
[Key points of judgment]
If the non breaching party claims to determine the benefits that can be obtained after contract performance based on the difference between the market price at the place of contract performance and the contract price within a reasonable period after the breach occurs, the people's court shall support it in accordance with the law.
【 Brief Case 】
A certain stone company signed a "Marble Material Sales Contract" with a certain quarrying company, agreeing to guarantee the supply of 1200 cubic meters to 1500 cubic meters of stone per month for the first two years after the quarrying company has production capacity in the stone company. The contracted price for receiving marble materials is mainly divided into two categories based on their volume: 350 yuan per cubic meter and 300 yuan per cubic meter. From July 2011 to September 2011, a certain quarrying company supplied some stone materials to a certain stone company, but thereafter the company did not supply them. The stone company then sued and claimed that the quarrying company should bear the breach of contract losses for not supplying according to the contract. The evaluation report provided by a certain quarrying company shows that the unit price of raw materials is 715.64 yuan per cubic meter.
【 Reason for Judgment 】
The effective judgment holds that the evaluation report provided by a certain quarrying company shows a unit price of 715.64 yuan per cubic meter for stone waste, which is the cost incurred by a certain stone company to purchase the same quality of stone per cubic meter through alternative transactions after the quarrying company breaches the contract. Deducting the agreed supply price of 350 yuan per cubic meter from this price, which is the unit loss suffered by a certain stone company.
Judicial Interpretation Related Articles
Article 60 (3) of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the General Principles of the Civil Code of the People's Republic of China on Contracts states that if the non breaching party exercises the right to terminate the contract in accordance with the law but fails to carry out a substitute transaction, and claims to determine the benefits that can be obtained after the performance of the contract based on the difference between the market price at the place of performance of the contract and the contract price within a reasonable period after the occurrence of the breach, the people's court shall support it.
