Article 4 Where a contract is concluded by way of bidding, and the parties request confirmation that the contract is established when the notice of winning the bid arrives at the winning bidder, the people's court shall support it. After the contract is concluded, if the parties refuse to sign a written contract, the people's court shall determine the content of the contract on the basis of the bidding documents, bidding documents and the notice of winning the bid.
Where on-site auctions, online auctions, or other public bidding methods are used to conclude a contract, and the parties request confirmation that the contract is established when the auctioneer drops the hammer and the electronic trading system confirms the transaction, the people's court shall support it. After the contract is concluded, if the parties refuse to sign the transaction confirmation, the people's court shall determine the content of the contract on the basis of the auction announcement and the bidder's quotation.
Where an equity exchange or other institution presides over an auction or listing transaction, and the auction announcement, trading rules, and other documents published by it publicly determine the conditions that need to be met for the formation of the contract, and the parties request confirmation that the contract is established when the conditions are met, the people's court shall support it.
【Purpose of the Article】
This article is about the time of formation and legal liability of contracts concluded by means of bidding, bidding, auction and other bidding methods.
【Overview of Provisions】
This article stipulates how to determine the establishment of a contract and the corresponding legal liability if a contract is concluded by means of bidding, bidding, auction and other bidding methods.
Tendering and bidding is a special procedure for concluding contracts, and contracts concluded through tendering and bidding shall be subject to the special provisions of relevant laws and administrative regulations on tendering and bidding activities. The laws and administrative regulations regulating the bidding and bidding behavior are mainly the "Tendering and Bidding Law" and the "Regulations for the Implementation of the Tendering and Bidding Law". However, the Tendering and Bidding Law and the Regulations for the Implementation of the Tendering and Bidding Law mainly address the procedural issues involved in the conclusion of tendering and bidding, and substantive issues such as the establishment, validity and substantive terms of the contract still need to be identified and dealt with in accordance with the relevant provisions of the contract section of the Civil Code. Paragraph 1 of this article stipulates that if a contract is concluded by means of bidding, the contract shall be established when the notice of winning the bid reaches the winning bidder, and if the parties refuse to sign a written contract afterwards, the content of the contract shall be determined according to the bidding documents, bidding documents and the notice of winning the bid. This provision means that the legal consequence of a party's refusal to enter into a written contract is to bear the liability for breach of contract for non-performance of the contract. Previously, although Article 45 of the Tendering and Bidding Law stipulated that the party who regretted the bid after the notice of winning the bid was issued, it did not clarify whether this legal liability was liability for negligence in contracting or liability for breach of contract, which brought certain troubles to judicial practice. This is clarified in paragraph 1 of this article.
Auction refers to the transfer of specific items or property rights to the highest bidder in the form of open bidding. The main law regulating the rights and obligations of the parties to the auction is the Auction Law. In addition to the special provisions of the Auction Law, the establishment, validity and substantive terms of the contract shall also be determined and dealt with in accordance with the relevant provisions of the contract section of the Civil Code. Paragraph 2 of this article clearly stipulates that if a contract is concluded by means of auction or other public bidding, the contract shall be established when the auctioneer drops the hammer and the electronic trading system confirms the transaction, and if the parties refuse to sign the transaction confirmation after that, they shall also bear the liability for breach of contract.
Paragraph 3 of this article is a special provision made in response to the principle provisions of the preceding two paragraphs, that is, when an institution such as a property rights exchange presides over an auction or a listing transaction, if the auction announcement, trading rules and other documents published publicly determine the conditions for the formation of the contract, the contract shall be established when the conditions are met.
【Controversial Views】
Paragraph 2 of Article 45 of the Tendering and Bidding Law stipulates: "The notice of winning the bid shall have legal effect on the tenderer and the winning bidder. After the notice of winning the bid is issued, if the tenderer changes the result of winning the bid, or the winning bidder gives up the winning project, it shall bear legal responsibility in accordance with the law. Article 46 stipulates: "The tenderer and the winning bidder shall, within 30 days from the date of issuance of the notice of winning the bid, enter into a written contract in accordance with the bidding documents and the bidding documents of the winning bidder...... but in practice, it often happens that the tenderer or the winning bidder refuses to sign a written contract after the notice of winning the bid is issued. Then the problem that needs to be solved is whether the contract is established after the notice of winning the bid is issued, how to confirm the time point of establishment, and what kind of civil liability should be borne by the tenderer or the winning bidder who refuses to sign the written contract. Around the above two provisions of the Tendering and Bidding Law and the above-mentioned issues, there has been great controversy in the theoretical and practical circles. There are mainly the following views: the first view is the theory that the contract is not formed. According to the theory, when the tenderer issues the notice of winning the bid (another point of view: when the notice of winning the bid reaches the winning bidder), the contract has not yet been established, and there are no legal consequences that bind the tenderer and the winning bidder; After the tenderer and the winning bidder sign a written contract, the contract is established and takes effect at the same time. Therefore, the tenderer or the winning bidder who refuses to sign a written contract only needs to bear the liability for negligence in concluding the contract. In our view, this view is untenable. If through bidding and bidding, there is no agreement between the tenderer and the winning bidder, then the bidding and bidding procedures will lose their meaning of existence. The second view is that the contract has been formed but has not taken effect. According to the theory, when the notice of winning the bid is issued (another point of view: when the notice of winning the bid reaches the winning bidder), the contract is established but does not take effect, and the contract established through the bidding procedure will only take effect after the tenderer and the winning bidder sign the contract in accordance with the bidding documents, bidding documents and the notice of winning the bid. This theory regards the signing of the contract as an effective condition for the contract established by the tenderer and the winning bidder through the bidding and bidding procedures. In this regard, we believe that, similar to the first view, if an agreement is reached, but the contract does not take effect, special provisions of the law are required, and there is no such provision at present, so there is no legal basis for this argument, and there is a conflict with the legal effect of winning the bid as stipulated in Articles 45 and 46 of the Tendering and Bidding Law, which actually denies the binding force of the bidding procedure. The third point of view is the establishment of a reservation contract. According to the theory, after the issuance of the notice of winning the bid (another point of view: when the notice of winning the bid reaches the winning bidder), a written contract has been established between the tenderer and the bidder and takes effect, but the two parties have established an appointment contract, and the breach of the contract shall bear the liability for breach of contract of the reservation contract. We believe that this view is more conducive to protecting the transaction security and reasonable expectations of the parties than the aforesaid viewpoint, and is more in line with the basic theory of contract formation, but it ignores the fact that the advance contract is an agreement between the parties to conclude this contract within a certain period of time in the future, rather than a law that stipulates that the parties enter into a written contract within a certain period of time, and in the process of bidding, the parties do not first enter into an advance contract and then enter into this contract. In practice, the written contract is often understood as a requirement for the formation of a contract (this agreement) because the written contract here is mistakenly regarded as the written form provided for in Article 469 of the Civil Code or the specific form provided for in Article 135 of the Civil Code. In fact, the bidding documents and the notice of winning the bid are all in written form, so even if laws and administrative regulations stipulate that a certain contract should be in written form (such as a construction contract), the bidding documents and the notice of winning the bid have also met the requirements of written form. The fourth view is the theory that the contract is formed and effective. The theory believes that through bidding and bidding and the issuance of a notice of winning the bid, the tenderer and the bidder have reached an agreement on the offer and commitment, the written contract has been established and effective, and the parties regret the bid, refuse to recognize the result of winning the bid, and refuse to sign the contract, they shall bear the liability for breach of contract if they fail to perform according to the contract. This view is adopted in this provision.
Article 51 of the Auction Law stipulates that: "The auction shall be concluded after the highest price of the bidder has been confirmed by the hammer at the time of auction or by other means of publicly indicating the purchase order." Article 52 stipulates: "After the auction is concluded, the buyer and the auctioneer shall sign a confirmation of the sale. Therefore, there are different views on the relationship between the auction transaction and the transaction confirmation, and when the auction contract is established: one view is that the auction contract is established when the auctioneer falls the hammer; Another view is that the auction contract is not formed at the time of the auction, and the auction contract is not formed until the auction transaction confirmation is signed. The reasons are generally the same as those for the establishment of the above-mentioned tendering and bidding contracts.
[Understanding and Application]
1. When the contract concluded by bidding is established and how to determine the corresponding legal liability
In the process of concluding a contract by means of bidding and bidding, the contract text between the parties may include multiple texts such as bidding documents, bidding documents, notice of winning bid, separately concluded contracts, and contracts actually performed. How to recognize and determine the validity of these contract texts, and which contract text should be used to determine the relationship of rights and obligations when the parties have a dispute, are relatively controversial issues in judicial practice. In particular, as mentioned above, there have been controversies over whether the written documents constituted by the bidding documents, bidding documents and the notice of winning the bid have established a contract between the parties, and what legal liability the parties should bear if they refuse to sign a written contract. In our view, we should proceed from the analysis of the legal nature of these contract texts in accordance with the provisions of the Civil Code to discuss the time when the contracts were formed and the corresponding legal liabilities.
(A) the legal nature of the bidding documents, bidding documents, and bid-winning notices
Article 471 of the Civil Code stipulates that: "When a party concludes a contract, it may take the form of offer, acceptance or other means. "Tendering and bidding, as a special way of concluding a contract, should first of all conform to the rules for the formation of general contracts, and the process of concluding the contract also reflects the general legal characteristics of offers and acceptances. In the process of signing a bidding contract, it is usually necessary to go through several stages of bidding, bidding, bid evaluation and bidding, and form three main documents such as bidding documents, bidding documents and bid-winning notices. The following takes the bidding and bidding of construction projects as an example to elaborate on the legal nature of the three main documents.
The bidding documents are a summary of all the information required by the construction unit to the bidding unit for its participation in the bidding. Judging from the provisions of the Tendering and Bidding Law, Article 19 clearly stipulates that the bidding documents shall include all substantive requirements and conditions such as the technical requirements of the bidding project, the criteria for the qualification examination of bidders, the bidding quotation requirements and the bid evaluation standards, as well as the main terms of the contract to be signed. In practice, the bidding documents generally include three parts: first, the tender announcement or invitation to bid, instructions to bidders, bid evaluation methods, bidding file formats, etc., mainly introducing the basic information of the bidding project and the procedural rules of bidding activities; the second is the bill of quantities, design drawings, technical standards and requirements, contract terms, etc.; The third is other project information for bidders to understand, such as project address, hydrology, geology, etc. Therefore, from the composition of the bidding documents, its main content lies in the tender announcement, and the main purpose is to hope that the bidder will send an offer to the tenderer to enter into a construction contract. Article 473 of the Civil Code also clarifies that the tender announcement is an invitation to make an offer. Therefore, the bidding document is an offer for the tenderer to invite the bidder to sign a contract, and its legal nature is an invitation to offer.
After the bidder learns of the tender announcement or receives the invitation to bid, he receives the bidding documents from the tenderer, prepares the bidding documents, and organizes the bidding, the purpose of which is to make an expression of intention to the tenderer to enter into a contract with the tenderer. Article 27 of the Tendering and Bidding Law stipulates that the bidder shall prepare the bidding documents in accordance with the requirements of the bidding documents, and the bidding documents shall respond to the substantive requirements and conditions put forward in the bidding documents. Therefore, the content of the bidding documents is generally specifically determined, and it is generally promised: once the tenderer commits to it, the bidder shall be bound by its bidding documents; During the validity period of the bid after the tender documents are issued, the bidder shall not modify the content of the bid documents and withdraw the bid documents at will. Therefore, once the bid is awarded, the bidder will be bound by the tender. To sum up, the bidding behavior is in line with the provisions of Article 472 of the Civil Code on offer, and the nature of the bidding documents is an offer.
The notice of winning the bid is a document that the tenderer issues a notice of winning the bid to the winning bidder in writing during the validity period of the bid, and at the same time as issuing the notice of winning the bid to the winning bidder, the tenderer also needs to notify the bidder who has not won the bid of the winning result. The content of the notice of winning the bid includes the name of the winning bidder, the name of the project, the winning price, the construction period, the quality of the project, the time of signing the contract, etc. Once the tenderer issues a notice of winning the bid to the bidder, the legal meaning is that the tenderer accepts the offer issued by the bidder, and the tenderer shall not modify the bidding conditions, and once it is made, it will be bound by the bidding documents. This act complies with the provisions of Articles 479 and 480 of the Civil Code on commitment.
From the above analysis, it can be seen that the three main legal documents formed in the process of bidding and bidding of construction projects, such as bidding documents, bidding documents and bid-winning notices, correspond to the complete written contract formation process such as invitation to offer, offer and commitment.
(2) The time when the contract is formed and takes effect is when the notice of winning the bid is issued or when the notice of winning the bid reaches the winning bidder
Paragraph 2 of Article 45 of the Tendering and Bidding Law stipulates: "...... After the notice of winning the bid is issued, if the tenderer changes the result of winning the bid, or the winning bidder gives up the winning project, it shall bear legal responsibility in accordance with the law. Judging from the meaning of this paragraph, the notice of winning the bid shall take legal effect from the time when the tenderer issues it, that is, the effective rules of the notice of winning the bid adopt the doctrine of issuance. However, the Civil Code of the Mainland adopts the doctrine of arrival for the effective rule of non-dialogue expressions of intent made by specific counterparties. Article 137 of the Civil Code stipulates that: "An expression of intent made in the form of dialogue shall take effect when the counterparty knows its contents." Expressions of intent made in a non-dialogue manner shall take effect when they reach the counterpart......" Article 139 stipulates: "Expressions of intent made by way of public announcement shall take effect when the announcement is issued." "Interpreting the content of the above provisions, for the situation where the other party cannot be contacted after exhausting all contact information, the law allows the parties to send an expression of intent to the other party by way of public announcement, and the announcement takes effect immediately, that is, the doctrine of expression of intent is effective; For a specific counterpart, the expression of intent to take effect in a dialogue mode, such as face-to-face bargaining, adopts the doctrine of understanding, that is, the effective time of the expression of intent is the time when the counterparty knows its contents; For a specific counterparty in a non-dialogue manner, if the expression of intent in the form of written notification takes effect, the doctrine of arrival is adopted, that is, when the expression of intent reaches the counterpart, it takes effect. Tendering and bidding is a special way of concluding contracts, but its provisions on the validity of expressions of intent such as offers and promises should conform to the general rules of civil law. Paragraph 1 of Article 484 of the Civil Code stipulates that: "The provisions of Article 137 of this Law shall apply to the effective time of the commitment made by way of notice. "The legal nature of the notice of winning the bid is a written commitment issued by the tenderer, and its intention is expressed in a non-dialogue manner (written notice) to a specific counterparty (winning bidder), and it is more in line with legal principles to adopt the effective rules of the doctrine. Therefore, paragraph 1 of this article stipulates that "if a contract is concluded by way of bidding, and the parties request confirmation that the contract is established when the notice of winning the bid reaches the winning bidder, the people's court shall support it", which clarifies that the notice of winning the bid shall take legal effect from the time it reaches the winning bidder.
(3) Whether the contract or the reservation contract is established when the notice of winning the bid reaches the winning bidder
As mentioned above, there are also two views on the nature of the winning contract that is formed after the notice of award reaches the winning bidder. The first view is that only the reservation contract is established, and the contract is only established when the tenderer and the winning bidder enter into a written contract in accordance with the bidding documents and the bidding documents of the winning bidder within 30 days from the date of issuance of the notice of winning the bid in accordance with Article 46 of the Tendering and Bidding Law; The second view is that the contract is formed when the notice of winning the bid reaches the winning bidder. The second view is adopted in this article.
A reservation contract is a contract that stipulates that a certain contract will be concluded in the future. Article 495 of the Civil Code stipulates that: "A subscription letter, order book, reservation book, etc., in which the parties agree to conclude a contract within a certain period of time in the future, constitutes an advance contract. If one of the parties fails to perform the obligation to conclude the contract as stipulated in the reservation contract, the other party may request it to bear the liability for breach of the reservation contract. "The main difference between the pre-contract and the contract is that the time and purpose of the contract are different: the pre-contract is a contractual relationship reached in advance before the rights and obligations are actually determined; This contract is a determination of actual rights and obligations.
The view that only an advance contract is established after the notice of winning the bid arrives at the winning bidder does not conform to the provisions of the Tendering and Bidding Law and is also inconsistent with actual practice. According to the provisions of the Tendering and Bidding Law, the bidding process itself is a process of negotiation between the two parties to the contract on the substantive matters of rights and obligations involved in the bidding and bidding contract relationship. This is fundamentally different from the pre-contract situations listed in Article 495 of the Civil Code before the actual determination of rights and obligations such as subscription letters, order letters, and reservation letters. In practice, after the notice of winning the bid is issued, the tenderer and the winning bidder do not sign a written contract, and the winning bidder can start to enter the site to perform its obligations with the consent of the tenderer. If it is considered that the parties only constitute an advance contract, the obligation of the winning bidder is only to conclude the contract in accordance with the bidding documents, and it is not necessary to enter the venue at all. In addition, the tenderer and the winning bidder shall, within 30 days from the date of issuance of the notice of winning the bid, enter into a written contract in accordance with the bidding documents and the bidding documents of the winning bidder, which is the provisions of the Tendering and Bidding Law, rather than the appointment agreement reached by the parties to sign the contract in the future, that is, there is no appointment agreement between the parties. Therefore, paragraph 1 of this article stipulates that "if a contract is concluded by way of bidding, and the parties request confirmation that the contract is established when the notice of winning the bid reaches the winning bidder, the people's court shall support it".
(4) After winning the bid, if the tenderer changes the bid-winning result or the winning bidder gives up the bid-winning project, it shall bear the liability for breach of contract or the liability for negligence in contracting
Paragraph 2 of Article 45 of the Tendering and Bidding Law stipulates: "...... After the notice of winning the bid is issued, if the tenderer changes the result of winning the bid, or the winning bidder gives up the winning project, it shall bear legal responsibility in accordance with the law. It is not clearly defined whether the "legal liability" here is liability for breach of contract or liability for contractual negligence, which also leads to two different views on the nature of legal liability for breach of the bid-winning commitment in practice. The first point of view is that the liability for negligence in contracting should be borne on the grounds that the contract has not been established after the notice of winning the bid arrives at the winning bidder, and the tenderer and the winning bidder are still in the process of concluding the contract, so either party repents at this stage and only bears the liability for negligence in the contract, and only after the two parties enter into a written contract in accordance with the provisions of Article 46 of the Tendering and Bidding Law, the winning contract can be established, and the subsequent breach of the contract should bear the liability for breach of contract. The second view is that the winning contract will be established after the notice of winning the bid reaches the winning bidder, and both the tenderer and the winning bidder have in fact entered the performance stage, so either party should bear the liability for breach of contract if it violates the bid-winning commitment. From the provisions of paragraph 1 of this article, "if a contract is concluded by way of bidding, and the parties request confirmation that the contract is established when the notice of winning the bid reaches the winning bidder, the people's court shall support it", it can be inferred that this article clarifies that the legal liability of either party for breach of contract is in nature a liability for breach of contract, rather than a liability for negligence in concluding the contract.
There is an essential difference between the legal consequences of liability for breach of contract and liability for contractual negligence: for contractual negligence liability, the counterparty can only claim compensation for the loss of trust interests, for example, if the bidder withdraws the bid, the tenderer may not return its bid deposit; As for the liability for breach of contract, in addition to direct losses, the non-breaching party can also claim compensation for the loss of benefits from the performance of the contract. In practice, it often happens that the tenderer does not pay attention to the legal effect of the notice of winning the bid, does not sign the contract with the winning bidder without justifiable reasons after the notice of winning the bid is issued, and is unwilling to bear the liability for breach of contract, which should be taken as a warning.
2. When a contract concluded by auction or other means is established and how to determine the corresponding legal liability
Article 3 of the Auction Law stipulates that an auction refers to a method of buying and selling a specific item or property right that is transferred to the highest bidder in the form of open bidding. Accordingly, auction is an effective way to obtain the highest market price of an item by organizing many people to bid for a certain item publicly, in order to achieve a price consistent with the value of the item itself and an important form of commodity circulation. Auctions can be divided into arbitrary auctions and compulsory auctions based on whether the auction is arbitrary. Arbitrary auction is the act of a citizen or legal person transferring a specific item or property right to the highest bidder based on free will, and the core feature is that the highest bidder wins. Compulsory auction is an auction carried out by the competent authority on the property of a specific party based on the coercive power of the state, such as an online judicial auction. In terms of auction channels, auctions can be divided into physical auctions and online auctions. Physical auction is a traditional type of auction, and the auction method is the auctioneer's hammer. According to the definition given in the Regulations on Online Auctions issued by the General Administration of Quality Supervision, Inspection and Quarantine of the People's Republic of China and the Standardization Administration of the People's Republic of China on April 5, 2016, an online auction is a method of transferring specific items or property rights to the highest bidder through the Internet in the form of open bidding, and the auction method is that the electronic trading system automatically confirms the highest bidder.
(1) The legal nature of the auction announcement and the auction transaction confirmation
According to Articles 45, 46 and 47 of the Auction Law, the auctioneer shall publish the auction announcement seven days before the auction date, and the auction announcement shall be published through newspapers or other news media; The auction announcement shall indicate the following matters: the time and place of the auction; auction objects; the time and place of display of the auction object; Procedures to be completed to participate in the bidding; Other matters that need to be announced. Article 48 also stipulates that the auctioneer shall display the auction objects before the auction and provide the conditions for viewing the auction objects and relevant information. With regard to the legal nature of the auction announcement published by the auctioneer before the auction or issued in other forms, article 473 of the Civil Code clearly stipulates that the auction announcement is an invitation to make an offer.
As to the nature and validity of the auction transaction confirmation, the relevant legal provisions are not specific enough, and disputes arising from the transaction confirmation are not uncommon in practice, so it is necessary to further clarify. Auction transaction confirmation is a common practice in the domestic auction industry in mainland China, and it is rare in extraterritorial auctions. The appearance of the auction transaction confirmation can be traced back to 1987, when during the auction process, the transaction was declared successful with a hammer, and there was no paper document to prove it, in case the auction party repented, the evidence was difficult to find, so the auction transaction confirmation was designed as evidence of the auction transaction. Since then, there has been a provision for the buyer to sign a confirmation of the auction transaction with the auctioneer on the spot after the auction is concluded. There has always been controversy as to the legal effect of the auction transaction confirmation: one view is that the auction contract is not established until the auction transaction confirmation is signed; Another view is that in traditional auctions, the auction contract is formed after the auctioneer drops the hammer, and the auction transaction confirmation is only a written certificate. In response to this dispute, it was suggested that it was not appropriate to treat the auction confirmation as an independent contract. The main reason is that an auction is essentially a kind of sale, and a sales contract will involve many aspects, including the basic information of the parties to the contract, the subject matter of the contract, the quantity of the subject, the quality of the subject, the price, the commission, the performance period, the place and method of performance, the liability for breach of contract and the method of dispute resolution. Each aspect needs to be determined by the parties to the contract by way of offer and acceptance, and the contract is formed after the above contents are determined. In the course of the auction, only the main factor, i.e., the price of the contract, was actually determined through open bidding. The remaining contents, such as the subject matter of the contract, quantity, quality, commission, performance period, place and method of performance, liability for breach of contract and dispute resolution methods, etc., need to be determined again. Therefore, it would be more appropriate to consider the auction confirmation as not a separate contract. We share that view.
In the auction, after the bidder puts forward the highest price, the auctioneer confirms the hammer, that is, makes a commitment, and the auction is concluded. In order to confirm the agreement on such a transaction and smoothly realize the handover of the auction object, the auctioneer shall immediately sign a confirmation of the auction transaction with the buyer. The auction transaction confirmation is not only a written proof of the auction transaction, but also the basis for the buyer and seller to perform their obligations. As mentioned earlier, first of all, the auction transaction confirmation is not a separate contract, but an integral part of the auction transaction contract. Secondly, the confirmation of the auction transaction is a written confirmation of the fact that the auction was concluded, and is not a necessary condition for the formation of the auction contract. The premise for the buyer and the auctioneer to sign the transaction confirmation is that the auction contract has been established, which is equivalent to the post-contractual obligation after the auction is concluded, and the buyer cannot be exempted from liability for breach of contract just because the transaction confirmation has not been signed. Finally, under special circumstances, the auction transaction confirmation can be regarded as an auction contract. In practice, some auction institutions stipulate the name, quantity, transaction price, commission and other contents of the auction object in the auction transaction confirmation, and the auction transaction confirmation actually plays the role of recording the rights and obligations of the auction parties, which can be regarded as an auction contract.
(2) When the auction contract is established
Under normal circumstances, after the auction is confirmed, the auctioneer will immediately arrange for the buyer to sign the auction transaction confirmation, and the time interval between the auction and the signing of the auction transaction confirmation is very short. However, this is, after all, a theoretical issue in the formation of a relationship contract, and in some special circumstances, if the auctioneer is unwilling to deliver the auctioned items to the buyer, deliberately delays or even refuses to sign the auction transaction confirmation, or if the buyer refuses to sign the auction transaction confirmation and regrets the auction, how to determine the rights and obligations of the parties involves the issue of the time standard for the conclusion of the auction contract. In this regard, it is necessary to return to the nature of the auction in order to draw a correct conclusion. Auction is, by its very nature, a specific form of buying and selling. "The so-called auction refers to a special way for the auctioneer to choose the one with the highest bid to conclude a contract with the auctioneer among many offers." Therefore, although the auction is different from the general sale due to the introduction of the open bidding mechanism, the establishment of the auction contract is still based on the agreement of the parties. The way in which the intention is expressed in the auction is the offer and the acceptance, and the contract is formed when the commitment takes effect. According to the general theoretical viewpoint and the provisions of the Civil Code, the auctioneer's auction expression is an invitation to make an offer, the bidder's bid is an offer, and the auctioneer's expression of auction by hammer or other customary methods is a promise, and the acceptance will take effect and the auction contract will be declared. For this reason, Article 51 of the Auction Law stipulates that "the auction shall be concluded after the highest bid of the bidder has been confirmed by the auctioneer under the gavel or by other means of publicly indicating the purchase order." ”
According to the general principle of the establishment of the sales contract, it is inappropriate to take the time of the auction as the time when the auction contract is established, but after all, the judicial compulsory auction is an enforcement measure for the court to exercise the public power of the state, so should the time of the auction be different? We believe that in terms of procedural matters, judicial compulsory auction should be carried out in strict accordance with the relevant procedural laws and compulsorily promoted by the public power of the state, but in terms of the change and transfer of the rights of the auctioned property, it should still be based on the norms and theoretical understanding of the civil law on sales contracts. In other words, the auction contract is still a specific carrier of the judicial compulsory auction, and when observing and analyzing whether the auction is concluded, it is still necessary to rely on the relevant theories of contract law to draw conclusions. In this regard, there is no difference between a judicial compulsory auction and a commercial arbitrary auction, so the transaction time of the judicial compulsory auction is still the time when the auction item is determined. Of course, in online judicial auctions, the form of auction is different from the traditional hammer drop, and during the bidding time, the bidder with the highest bid will be automatically determined by the system as the buyer, and the system's confirmation and locking of the buyer's identity is the specific form of commitment, at which point the auction item is auctioned and the auction contract is declared. Article 22 of the Provisions on Online Judicial Auctions stipulates that if an online judicial auction is concluded, the online judicial auction platform shall automatically generate a confirmation with the true identity of the buyer and publicize it. In the online environment, the time between the auction transaction and the generation of the auction transaction confirmation will be shorter, but after all, the two are different in terms of legal attributes, and an accurate grasp of the relationship between the two can help to correctly handle some disputes that may arise.
(3) If the buyer refuses to sign the transaction confirmation after the auctioneer has dropped the hammer or the online auction electronic trading system confirms the transaction, it shall bear the liability for breach of contract
As mentioned above, when the auctioneer drops the hammer and the electronic trading system confirms the transaction, the auction contract between the auctioneer and the buyer is established, and the confirmation of the transaction is not a requirement for the establishment of the auction contract. Therefore, if the buyer refuses to sign the transaction confirmation and refuses to perform the auction contract after the auction contract is concluded, the people's court shall determine the content of the contract based on the auction announcement and the bidder's quotation, and determine that the buyer bears the corresponding liability for breach of contract. This is the same as the fact that the tenderer changes the bid-winning result after winning the bid or the winning bidder gives up the bid-winning project and shall bear the liability for breach of contract, and will not be repeated.
[Practical issues]
1. Whether there is any contradiction between the provisions of the Civil Code and the Tendering and Bidding Law on the time of contract formation
In practice, in addition to the above-mentioned dispute over whether the notice of winning the bid is issued or takes effect, there are also different views on the time of the establishment of the winning contract, such as the aforesaid "theory that the contract is not established" and "the theory that the contract has not taken effect". These two views are led by the provisions of Article 46, Paragraph 1 of the Tendering and Bidding Law. Paragraph 1 of Article 46 of the Tendering and Bidding Law stipulates that "the tenderer and the winning bidder shall, within 30 days from the date of issuance of the notice of winning the bid, enter into a written contract in accordance with the bidding documents and the bidding documents of the winning bidder...... In this regard, we believe that the winning contract is a civil contract, and the criteria for determining the establishment of a civil contract should be substantive rather than formal, which is the general principle of civil contracts. Article 470 of the Civil Code stipulates that: "The content of the contract shall be agreed upon by the parties and generally include the following clauses: (1) the names and addresses of the parties; (2) the subject matter; (3) Quantity; (4) Quality; (5) Price or remuneration; (6) The time limit, place and method of performance; (7) Liability for breach of contract; (8) Methods of dispute resolution. "After the notice of winning the bid arrives at the winning bidder, according to the notice of winning the bid, the bidding documents of the winning bidder and the bidding documents, not only the necessary terms of the contract, that is, the parties to the contract, the subject matter, and the quantity clauses have been determined, but also all the main terms of the contract stipulated in Article 470 of the Civil Code have been determined, combined with the provisions of the Civil Code "the contract is established when the commitment takes effect", it should be determined that the tenderer and the winning bidder have in fact established a contractual relationship. In addition, Article 46 of the Tendering and Bidding Law not only stipulates that "the tenderer and the winning bidder shall, within 30 days from the date of issuance of the notice of winning the bid, conclude a written contract in accordance with the bidding documents and the bidding documents of the winning bidder", but also stipulates that "the tenderer and the winning bidder shall not enter into other agreements that deviate from the substantive content of the contract". Therefore, the provisions of the Civil Code on the time of contract formation do not contradict the Tendering and Bidding Law. Judging from the legislative intent of Article 46 of the Tendering and Bidding Law, it mainly aims to regulate the bidding and bidding activities, and the reason why the parties are required to sign a written contract within a certain period of time after the issuance of the notice of winning the bid is to clarify the rights and obligations of both parties through the combing and integration of the bidding documents and bidding documents, and then take the signing of the written contract as a legal obligation of the parties after the contract is established, so as to achieve the purpose of facilitating the performance of the contract, rather than taking the signing of the written contract as a condition for the formation of the contract. The contract entered into by the tenderer and the winning bidder can be agreed on the performance details without deviating from the substantive terms, and the main content is consistent with the content of the bidding and bid-winning documents, which has no impact on the validity of the contract that has been established between the tenderer and the winning bidder. Therefore, it should be considered that the written contract provided for in Article 46 of the Tendering and Bidding Law is a form of written confirmation required by law after the conclusion of the contractual relationship, and not a new contract.
II. How to bear liability for breach of contract if the buyer repents of the auction in an online judicial auction
With regard to the handling of remorse in judicial auctions, there are currently two judicial interpretation provisions. The first is Article 25 of the Provisions of the Supreme People's Court on the Auction and Sale of Property in Civil Enforcement by the People's Courts (Fa Shi [2004] No. 16), which came into effect on January 1, 2005 (Article 22 after the amendment in 2020). This article stipulates that the original buyer shall bear the price difference, cost losses and commissions in the original auction caused by the price of the re-auction being lower than the original auction price, and the people's court may directly deduct it from the deposit paid in advance. If there is any surplus of the deposit after deduction, it shall be returned to the original buyer; If the amount of the deposit is insufficient, the original buyer may be ordered to make up the payment; and where they refuse to make up the payment, it shall be enforced. The second is Article 24 of the Provisions on Online Judicial Auctions, which came into effect on January 1, 2017. This article stipulates that if the buyer regrets the auction after the auction is concluded, the deposit paid shall not be refunded, and shall be used to pay the expenses and losses incurred in the auction, make up for the difference between the re-auction price and the original auction price, and offset the debts of the person subject to enforcement in this case and the debts of the person subject to enforcement related to the auctioned property. In view of the issue of regret in online judicial auctions, Article 24 of the Provisions on Online Judicial Auctions clarifies the principle of "non-refundable" for the deposit paid in advance by the repentant auctioneer, but does not clearly stipulate whether the original buyer can be ordered to make up the difference between the amount of the deposit and the re-auction price when the amount of the deposit is insufficient to cover the expenses and losses incurred by the auction and make up the difference between the re-auction price and the original auction price.
The first view is that, in the case of online judicial auction remorse, Article 24 of the Provisions on Online Judicial Auction provides that the principle for determining the security deposit paid by the original buyer is "no refund if there is more, and no compensation for the less", that is, the original buyer shall only be liable for the cost loss and price difference caused by the re-auction due to the original buyer's regret of the auction, and even if the amount of the deposit is insufficient, the original buyer cannot be ordered to make up the amount in the enforcement procedure. or in the trial procedure, the original buyer shall be sentenced to bear the liability for breach of contract for the loss of the difference between the two auction prices. The second view is that the Provisions of the Supreme People's Court on the Auction and Sale of Property in Civil Enforcement by the People's Courts shall be applied in accordance with the provisions of Article 37, Paragraph 3 of the Provisions on Online Judicial Auction, which stipulates that "if there are no provisions in these Provisions on online judicial auctions, other provisions on judicial auctions shall apply".
On this disputed issue, we agree with the second view, that is, the liability of the repentant auctioneer for breach of contract is not limited to the security deposit. First of all, Article 584 of the Civil Code stipulates that: "If one of the parties fails to perform its contractual obligations or the performance of its contractual obligations does not conform to the agreement, resulting in losses to the other party, the amount of compensation for losses shall be equivalent to the losses caused by the breach of contract, including the benefits that can be obtained after the performance of the contract; provided, however, that it shall not exceed the losses that may be caused by the breach of contract that the breaching party foresaw or should have foreseen at the time of entering into the contract. Obviously, the difference between the two auction prices belongs to the "benefits that can be obtained after the performance of the contract", and should generally be included in the scope of the liability of the repentant auctioneer for breach of contract. So, is the benefit limited by the foreseeable rule and is it an unforeseeable loss? According to paragraph 2 of Article 39 of the Auction Law, if the price of the auction object is lower than the original auction price, the original buyer shall make up the difference. Under the circumstance that the law clearly stipulates that the difference between the two auction prices is an unforeseeable loss. Of course, the application of the foreseeable rule should be analyzed on a case-by-case basis. Second, from the perspective of maintaining the order of online judicial auctions, online judicial auctions are an important part of the people's courts' compulsory enforcement, representing judicial authority and public order, and if the bidder deliberately pays a high price and then regrets the auction, in addition to causing losses to the parties, it also causes damage to the judicial authority and disrupts the auction order. Finally, in light of the characteristics of online judicial auctions, in order to ensure that bidders fully understand the bidding rules and legal risks, and to reduce enforcement disputes and litigation disputes, the enforcing court should give special reminders in the auction announcement and bidding instructions, and clarify the principle of "more than refund, no less compensation".