Contract performance under novel coronavirus epidemic I

 2020-02-28  141


                                                                  

                                                                                                           


To actively promote the unified applicable law of work on cases under novel crown pneumonia outbreak , to improve the level of the epidemic prevention and control of the rule of law, the Shanghai higher people's court issues a series of questions and answers concerning the applicable law and procedural matters to cases influenced by the novel crown pneumonia outbreak. Shanghai Nuo Di Law Firm translate and sort out the key issues as below:

 

Q1: What are the basic principles of dealing with cases of contract disputes influenced by the novel coronavirus epidemic?

 

Answer: There are four principles:

Firstly, adhere to the principle of equity of interests, properly resolve conflicts and disputes;

Secondly, adhere to the principle of strict observance of contracts and encourage the normal performance of contracts as agreed;

Thirdly, adhere to the principle of fairness and justice, prudently deal with the termination of the contract.

Fourthly, adhere to the principle of seeking truth from facts and apply the principles of force majeure or change of circumstances in accordance with the law.

 

Q2: Is the outbreak of new crown pneumonia a force majeure event?

 

Answer: According to Article 180 of the "General civil law of the People's Republic of China" and Article 117 "Contract law of the People's Republic of China, after the pneumonia outbreak was identified as a public health emergency, to protect people's health and life safety, the government and relevant departments take corresponding epidemic prevention and control measures. For those who are unable to perform the contract or exercise their rights in time, the occurrence of the epidemic should be regarded as an unforeseeable, unavoidable and insurmountable force majeure event.

 

Q3: How to determine the starting and ending time if the outbreak of novel coronavirus pneumonia is confirmed as force majeure?

 

Answer: It is determined according to the actual impact of the outbreak of the novel coronavirus pneumonia on the performance of the contract, the realization of the contract purpose or actual influence on the exercise of the rights of the parties. Generally, it can be determined according to the time when the people's government at the provincial level in the place, where the contract is performed or where the party resides, starts and terminates the response to a major public health emergency.If the response to a major public health emergency has not been initiated by the people's government at the provincial level in the place where the party has his domiciles or where the contract is performed, it may be determined on the basis of the time when the response to a major public health emergency was initiated and terminated by the Shanghai municipal people's government.

 

Q4: How to understand and apply the provision of Article 118 of the Contract Law of the People's Republic of China to the civil and commercial cases influenced by the outbreak of novel coronavirus pneumonia?

 

Answer: According to Article 118 of the Contract Law of the People's Republic of China, in case of any obstacle to the performance of a contract due to an epidemic, the debtor shall, on the basis of the principle of good faith, promptly notify the creditor and submit proof of force majeure within a reasonable period of time.As for the obligations of notification and proof stipulated in this article, we should not make excessive requirements in practice.

 

Q5: Can force majeure be applied as a reason for exemption from liability for delay in the performance of the contract caused by the epidemic, such as delay in delivery by the seller of the sales contract?

 

Answer: During the epidemic prevention and control period, if the parties claim liability for breach of contract such as delay in performance due to force majeure, they should distinguish the specific circumstances, mainly depending on the impact of the epidemic prevention and control measures on the performance of obligations.

 

For monetary payment obligations, the epidemic prevention and control measures will not affect the performance of monetary debt, unless it involves the delay in the opening of the financial market and other special circumstances, generally cannot claim exemption by epidemic prevention and control measures.

 

For the performance of non-monetary debts, such as the seller's delay in resuming work due to the need of epidemic prevention and control, the isolation measures taken, and the national expropriation, etc., which lead to the failure to perform the delivery obligations, the seller may claim exemption or partial exemption from the performance obligations due to force majeure, or request delay in the performance.

 

Q6: Can commercial renters claim a reduction in the rent during an outbreak?

 

Answer: It depends according to specific case. If the house affected by the outbreak of the disease can not be used normally, the lessee can request the lessor to reduce the rent, which generally can be supported.If the epidemic situation does not affect the lessee's actual possession of the premises, and the operating income of the lessee is affected only by the reduction of customers during the epidemic period, the lessee's obligation to pay rent shall not be exempted in general;In the event of significant impairment to the lessee's revenue, the rent may be adjusted at the discretion of the lessee in accordance with the principle of equity.

 

Q7: Can a tenant of a residential apartment claim a reduction in the rent during an outbreak?

 

Answer: The parties concerned shall be guided to negotiate a settlement.If no agreement can be reached through negotiation, it shall be properly handled in accordance with the principle of equity by taking into account the lease period agreed in the contract and the mode of performance, the actual possession and use of the premises, the degree of impact of the epidemic and other comprehensive considerations.If the lessee is actually unable to use the apartment due to the lessor's active restrictions or relevant control measures are taken in the location of the apartment, the request for rent reduction from the lessee shall generally be supported. If the epidemic does not affect the tenant to live and use, and the tenant does not have the objective situation of being hospitalized with new coronavirus pneumonia or being isolated and unable to use the apartment, that the tenant puts forward the request for rent remission is generally not supported.

 

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