The latest revised version of Interpretation of the Supreme People's Court on Issues Concerning the Application of Law for the Trial of Cases of Disputes over Sales Contracts by the Supreme Court has made some contents different from the original version. Shanghai Dongjin is putting these changes in this article.
Same as other changes within the whole law system at 2021, Civil Code of the People’s Republic of China has been added as the guideline and basis for ruling cases of sales contracts, and corresponding article numbers which are quoted from the Civil Code of the People's Republic of China have all been changed in compliance.
In this judicial interpretation, issue for legal effect of sales contracts is no longer stated, also the contents for subject matter retrieving by the seller under ownership conservation, subject matter redemption by the buyer and determination of consent to purchase during the period of try-out are deleted in this edition.
The whole new version of interpretation uses “Limitation” to replace the term “Period” while due articles involve descriptions for time.
As for liquidated damages for overdue payment of sales contracts, if there is no agreement in the contract or the calculation method is unclear, and the seller claims for loss of overdue payment due to the buyer’s liability for breaching contract, when the violation happened before August 19th, 2019, calculation basis for courts could be benchmark rate for similar RMB loans from The People’s Bank of China and default interest rate of overdue payment as a reference; when the violation happened after August 20th, 2019, standard for courts could be the one-year loan prime rate (LPR) at the time of the violation which was publishes by the National Interbank Funding Center authorized by The People’s Bank of China and the calculation shall be added 30% to 50% while dealing with the loss of overdue payment.
If you want to read the complete article, you can refer to the below link (in Chinese only): http://www.shanghaiinvest.com/cn/viewfile.php?id=15722
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Mr. Mike Chang (Partner)