On the Relationship between the Application of Actual Performance and Compensation for Damages in the Civil Code of the People’s Republic of China

Abstract

The Civil Code of the People’s Republic of China stipulates that actual performance and compensation for damages are the main remedies for breach of contract, but does not specify the order of their application. Actual performance does not fall in the effect of a claim of debt as it contains a negative evaluation of breach of contract. The application of compensation for damages is limited by the difficulty to determine the benefits of performance. Hence, neither has a basis for priority application in the general sense. This paper aims to improve the accuracy of judgments by clarifying the relationship between actual performance and the compensation for damages using typed research methods. In terms of value, the liability for breach of contract should be decided primarily based on the fulfillment of the purpose of the contract and efficiency as well. In terms of method, the judgment should be made comprehensively based on the degree and form of breach of contract, combined with the characteristics of the type of contract debt.