Front.Law China(2006)1:121-152 141 No requirement of fault The original purpose of termination of contract is to release the creditor from his unperformed contractual obligations,so there is no need to require a fault on the side of breaching party for the other party's exercise of a right to termination.This point has been make certain since the first draft of CCL in 1994,and it has been preserved by CCL.In this aspect,CCL has surpassed its corresponding part in many other Civil Law systems. Breach of contract (non-performance of contract) In the first draft of CCL,statutory rights to termination are laid down in six articles in accordance with a kind of traditional civil law analyzing frame,namely according to pattems of nonperformance such as impossibility,delay,refuse to perform,defective performance, partial performance and nonperformance of ancillary obligations.This kind of formulation was thought too tedious to be accepted,so they were replaced by one article since the third draft of CCL,and some of ingredient from art.25 of CISG (fundamental breach)was introduced.7 The change gave CCL a fateful impact and buried a seed that would cause a divergent interpretation about art.94 of CCL.By one kind of opinion,art.94 of CCL should be interpreted by a theory of fundamental breach.But in accordance with the original idea of the drafter of the part of Termination of CCL,art.94,especially sents.2 and 3,should be interpreted by the traditional civil law analyzing frame as mentioned above.48 Refuse to perform Before the period of performance expires,if a party clearly indicates by word or by act that it will not perform its main obligations,the other party may terminate the contract (art.94 sent.2).The provision learnt a lot from rules of anticipatory breach from Common Law.It is noticeable that the mere indication not to perform by the debtor,no matter by word or by act,may entitle the creditor to terminate the contract.Whether a"Nachfrist" should be required becomes a point of dispute in China.4 Doubtlessly,the situations laid down in art.68 of CCL (the defense of insecurity)may overlaps with the situation of a debtor indicating not to perform by its act in art.94 sent.2. While according to art.69,where a party suspends its performance in accordance with the provisions of Article of 68 of the Law,it shall promptly notify the other party of the suspension.The party shall resume its performance when the other party provides a guarantee. The party that has suspended its performance may terminate the contract if the other party has failed to regain its capability to perform the contract and to provide a guarantee within a reasonable period of time.It is clear that the termination of contract in this kind of situation requires a notice and a"Nachfrist"(as used in art.69"a reasonable period of time").In my opinion,in the situation of a debtor indicating not to perform by its act in art.94 sent.2,there should be a requirement for"Nachfrist"so as to overcome the divergence between art.69 and art.94 sent.22. 47 As a piece of Japanese material on this change during the drafting of CCL,see Weirong Qian.The statutory rights to termination in Chinese contract law,in NBL No.699 (2000.10.15).p.62. 48 The drafting work of the "Termination of Contract"part of CCL's first draft was in charged by Professor Jianyuan Cui.The first draft of this paper had been read by Professor Cui,and the author wishes to thank Professor Cui for his helpful comments on this part. 4 See Jianyuan Cui ed.Law of contract,(2000,2nd ed.).p.203.No requirement of fault The original purpose of termination of contract is to release the creditor from his unperformed contractual obligations, so there is no need to require a fault on the side of breaching party for the other party’s exercise of a right to termination. This point has been make certain since the first draft of CCL in 1994, and it has been preserved by CCL. In this aspect, CCL has surpassed its corresponding part in many other Civil Law systems. Breach of contract (non-performance of contract) In the first draft of CCL, statutory rights to termination are laid down in six articles in accordance with a kind of traditional civil law analyzing frame, namely according to patterns of nonperformance such as impossibility, delay, refuse to perform, defective performance, partial performance and nonperformance of ancillary obligations. This kind of formulation was thought too tedious to be accepted, so they were replaced by one article since the third draft of CCL, and some of ingredient from art. 25 of CISG (fundamental breach) was introduced.47 The change gave CCL a fateful impact and buried a seed that would cause a divergent interpretation about art. 94 of CCL. By one kind of opinion, art. 94 of CCL should be interpreted by a theory of fundamental breach. But in accordance with the original idea of the drafter of the part of Termination of CCL, art. 94, especially sents. 2 and 3, should be interpreted by the traditional civil law analyzing frame as mentioned above.48 Refuse to perform Before the period of performance expires, if a party clearly indicates by word or by act that it will not perform its main obligations, the other party may terminate the contract (art. 94 sent. 2). The provision learnt a lot from rules of anticipatory breach from Common Law. It is noticeable that the mere indication not to perform by the debtor, no matter by word or by act, may entitle the creditor to terminate the contract. Whether a “Nachfrist” should be required becomes a point of dispute in China.49 Doubtlessly, the situations laid down in art. 68 of CCL (the defense of insecurity) may overlaps with the situation of a debtor indicating not to perform by its act in art. 94 sent. 2. While according to art. 69, where a party suspends its performance in accordance with the provisions of Article of 68 of the Law, it shall promptly notify the other party of the suspension. The party shall resume its performance when the other party provides a guarantee. The party that has suspended its performance may terminate the contract if the other party has failed to regain its capability to perform the contract and to provide a guarantee within a reasonable period of time. It is clear that the termination of contract in this kind of situation requires a notice and a “Nachfrist” (as used in art. 69 “a reasonable period of time”). In my opinion, in the situation of a debtor indicating not to perform by its act in art. 94 sent. 2, there should be a requirement for “Nachfrist” so as to overcome the divergence between art. 69 and art. 94 sent. 22. 47 As a piece of Japanese material on this change during the drafting of CCL, see Weirong Qian, The statutory rights to termination in Chinese contract law, in NBL No.699 (2000.10.15), p.62. 48 The drafting work of the “Termination of Contract” part of CCL’s first draft was in charged by Professor Jianyuan Cui. The first draft of this paper had been read by Professor Cui, and the author wishes to thank Professor Cui for his helpful comments on this part. 49 See Jianyuan Cui ed. Law of contract, (2000, 2nd ed.), p.203. Front. Law China (2006) 1: 121–152 141