Inefficiency of Specific Performance As a Contractual Remedy in Chinese Courts: An Empirical and Normative Analysis
40 Nw. J. Int’l L. & Bus. 275 (2019)
59 Pages Posted: 26 Nov 2019 Last revised: 3 Sep 2020
Date Written: November 25, 2019
This article investigates the values and latent policies, which have shaped the development of Chinese law in the area of the availability of specific performance (SP) as a contractual remedy. The National People’s Congress (Legislature) and Supreme People’s Court in China have addressed the remedial structure of Chinese contract law, namely, the availability of the remedy of SP as opposed to the awarding of damages-only. The law is clear that the remedies of SP and damages are ordinary remedies that a claimant is free to choose between. The question that is confronted in this article is whether in practice the equality of SP and damages as remedies are applied in a neutral, unbiased way by the Chinese courts. Simply put, how often do Chinese courts use SP as a remedy for contract breaches? If SP is found to be seldomly awarded, the question then becomes, what are the underlying reasons or rationales given for its underutilization? This article employs an empirical study based on data collected by surveys and follow-up interviews with hundreds of Mainland Chinese judges at various levels of the Chinese court system (related to civil and commercial disputes). Based on the statistical findings of the empirical study, a theoretical inquiry is offered to better understand the relative use or non-use of specific performance as a contractual remedy. The findings show that damages are often favored over specific performance; additionally, judges in the Mainland Chinese courts system take a far more proactive role in the preliminary stages of trials and will actively persuade parties to claim damages over specific performance where expedient. The study also shows that, despite popular belief, that the higher supervision costs associated with specific performance are not a determining factor in the decision to avoid the awarding of SP.
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