Qi X v. People’s Government of Jiagedaqi District, Daxinganling Prefecture, Heilongjiang Province

This article is now included as Article 592 of the Civil Code, which states “Where both parties default, each shall bear the corresponding liability. Where one party’s default causes losses to the other party, and the other party’s fault contributes to such losses, the amount of compensation may be mitigated accordingly”.

This article is now included as Article 577 of the Civil Code.

This article is now included as Articles 586 and 587 of the Civil Code. Article 586 states “The parties may agree that one party provides earnest money with the other party to secure the claim. An earnst money contract is formed upon actual delivery of the earnest money. This amount of the earnest money shall be agreed by the parties, except that it may not exceed 20% of the value of the object of the principal contract, and any excessive of the earnest money actually delivered is more or less than the agreed amount, the agreed amount of the earnest money is deemed to have been changed.” Article 587 states “After a debtor has performed the obligation, the earnest money shall be calculated as part of the price or be refunded. Where a party paying the earnest money fails to perform the obligation or fails to perform it in conformity with the agreement so that the purpose of the contract cannot be achieved, the party is not entitled to request a refund of the earnest money. Where a party receiving the earnest money fails to perform the obligation or fails to perform it in conformity with the agreement so that the purpose of the contract cannot be achieved, the party shall refund twice the amount of the esrnest money to the other party.”

This article is now included as Article 588 of the Civil Code, which states “Where the parties agree on both liquidated damages and earnest money, when a party defaults, the other party may choose to apply either the clause on the liquidated damages or the clause on the earnest money. Where the amount of the earnest money is insufficient to compensate the losses caused by one party’s default, the other party may request compensation for the losses in excess of the amount of the earnest money”.

This article is now included as Article 584 of the Civil Code, which states “Where a party fails to perform the contractual obligation or the performance does not conform to the agreement so that the other party suffers losses, the amount of compensation shall be equivalent to the losses caused by the breach of contract, including the benefits expected to be obtained should the contract had been performed, except that it may not exceed such losses that the breaching party foresees or should have foreseen at the time of conclusion of the contract”.

This article is now included as Article 591 of the Civil Code, which states “After a party defaults, the other party shall take appropriate measures to prevent further loss. Where no appropriate measures are taken so that the loss is aggravated, no compensation shall be claimed for the aggravated part of the loss. The reasonable expenses incurred by a party in preventing the aggravation of the loss shall be borne by the breaching party”.