Article 6: Where the parties agree to conclude a contract within a certain period of time in the future in the form of a subscription letter, order book, reservation letter, etc., or have paid a deposit to guarantee the conclusion of a contract within a certain period of time in the future, and can determine the subject matter and subject matter of the contract to be concluded in the future, the people's court shall find that the reservation contract is established.
Where the parties only express their intention to make a transaction through means such as signing a letter of intent or memorandum, but do not agree to conclude a contract within a certain period of time in the future, or where there is an agreement but it is difficult to determine the subject and subject matter of the contract to be concluded in the future, and one party claims that the contract is established, the people's court will not support it.
Where the parties have reached an agreement on the main contents of the contract, such as the subject matter, quantity, price, or remuneration, and meet the requirements for the formation of a contract as provided for in the first paragraph of article 3 of this interpretation, and have not expressly agreed to conclude a separate contract within a certain period of time in the future, or where there is an agreement but one of the parties has already performed and the other party has accepted it, the people's court shall find that this contract is established.
【Purpose of the Article】
This article is about the determination of the reservation contract.
【Overview of Provisions】
A reservation contract is a type of contract, and it should have the general requirements for the formation of a contract, that is, the content is specifically determined and indicates that the parties are bound by the expression of intent. With regard to the degree of specific determination of the contents, considering that the reservation contract is a contract concluded for the purpose of concluding this contract in the future, the content of the reservation contract cannot be required solely by the degree of specific determination of the content of the contract, therefore, if the subject matter and subject matter of the contract to be concluded in the future can be determined, it can be determined that the content of the expression of intent has been specifically determined. From a practical point of view, under normal circumstances, such as letters of intent, memorandums, etc., only indicate that the parties have the intention to conclude a contract, and do not constitute an appointment contract. However, if the letter of intent, memorandum, etc. meets the requirements for the establishment of the aforesaid reservation contract, it shall also be deemed to constitute an reservation contract. In addition, even if the parties have not signed a written document such as a subscription letter, an order letter, a reservation letter, a letter of intent, a memorandum of understanding, etc., but have paid a deposit for the future conclusion of the contract, it should be deemed that an advance contract has been formed between the parties. In this regard, the contractual deposit is essentially a breach of contract deposit for the advance contract.
It should be noted that although the name of the contract has certain legal significance, it is still the content of the contract that determines the nature of the contract. Regardless of whether it is a letter of subscription, a letter of order, a letter of reservation, etc., or a letter of intent, a memorandum of understanding, etc., entered into by the parties, if the constitutive elements of this contract are met, and the parties have not expressly agreed to conclude a separate contract within a certain period of time in the future, the above-mentioned various forms of agreements shall be understood as this contract. In addition, according to Article 469 of the Civil Code, a contract can be concluded by way of an act, so if the agreement reached by the parties meets the constitutive elements of this contract, even if the parties agree to conclude a separate contract in the future, if one of the parties has performed the act of performance and the other party has accepted it, it means that the parties have reached an agreement on the conclusion of this contract, and the contract shall be deemed to be established.
【Controversial Views】
Article 495, paragraph 1, of the Civil Code regulates the pre-appointment contract and its expression. In practice, there is a dispute as to whether a subscription letter, an order letter, a reservation letter, etc., can constitute an appointment contract. Article 5 of the Judicial Interpretation of the Contract for the Sale and Purchase of Commodity Housing stipulates that: "If the agreement on the subscription, ordering, reservation and other agreements of commercial housing has the main content of the contract for the sale and purchase of commercial housing as stipulated in Article 16 of the Administrative Measures for the Sales of Commodity Housing, and the seller has accepted the purchase price in accordance with the agreement, the agreement shall be deemed to be a contract for the sale and purchase of commercial housing." As a result, there is also controversy in practice about how to distinguish between the reservation contract and the contract contract. In addition, in comparison with Article 2 of the Judicial Interpretation on Sales Contracts (Fa Shi [2012] No. 8), the Civil Code does not regard letters of intent and memorandums as forms of expression of advance contracts, does this mean that letters of intent and memorandums of understanding are only non-legally binding transaction intentions? In view of the above issues, it is generally believed that the determination of the reservation contract should adhere to the position that the content is superior to the form, that is, whether the document signed between the parties is a reservation contract should not be judged from the form, but whether the agreement between the parties is binding but does not constitute the contract from the content. However, there is also a view that the content of some advance contracts may be very comprehensive, or even richer than some of the present contracts, but even so, as long as the parties agree to conclude a contract in the future, it should be deemed to constitute a reservation contract rather than this contract, so the comprehensiveness of the content is not of great significance in distinguishing the reservation contract from the present contract.
[Understanding and Application]
In more complex transactions, it is a common situation in practice for the parties to conclude the transaction by first entering into an advance contract and then entering into this contract. In particular, when the parties agree that one of the parties has the obligation to sign a contract with a third party designated by the other party within a certain period of time due to the needs of the transaction, the reservation contract plays an irreplaceable role. In view of the increasing room for the role of the reservation contract in practice, the Civil Code, on the basis of absorbing the provisions of Article 2 of the Judicial Interpretation on Sales Contracts, stipulates the reservation contract (paragraph 1) and the liability for breach of contract (paragraph 2) in article 495, thus providing a clearer legal basis for the people's courts to handle the reservation contract dispute cases. However, since the reservation contract is a special contract different from the contract of this contract, there is considerable controversy over the determination of the reservation contract in practice. To this end, this article provides comprehensive and detailed provisions on the determination of reservation contracts.
1. The establishment and determination of the reservation contract
Paragraph 1 of 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." Compared with Article 2 of the Judicial Interpretation on Sales Contracts (Fa Shi [2012] No. 8), the provisions of the Civil Code on advance contracts are different in expression: in addition to the letter of subscription, order and reservation, Article 2 of the Judicial Interpretation of the Judicial Interpretation of Sales Contracts (Fa Shi [2012] No. 8) also lists the letter of intent and memorandum as the manifestations of the reservation contract, but Article 495 of the Civil Code does not list these two items. This is because, in practice, most of the letters of intent and memorandums of intent are only the intentions reached by the parties for further transactions, which are not legally binding in themselves, and naturally do not constitute an advance contract, and if the letter of intent and memorandum are clearly listed as the form of expression of the advance contract, it is likely to bring about certain misunderstandings. However, although the legislator has avoided this misunderstanding, the wording of Article 495, Paragraph 1 of the Civil Code on the reservation contract may still bring about another misunderstanding, that is, the subscription letter, purchase letter, reservation book, etc., which the parties agree to conclude the contract within a certain period of time in the future, constitute an advance contract. In fact, whether the agreement between the parties constitutes an advance contract does not depend on whether the agreement between the parties is a subscription letter, an order letter, a reservation letter, or a letter of intent or a memorandum in form, but depends on the content of the agreement between the parties. Obviously, if the agreement between the parties to conclude a contract within a certain period of time in the future is not specific enough in terms of content, or if it is specifically determined but does not indicate that the parties are bound by the expression of intent, even if it takes the form of a subscription letter, an order book, or a reservation letter, it cannot be recognized as an advance contract. On the contrary, if the agreement between the parties to conclude a contract within a certain period of time in the future is specified in terms of content and indicates that the parties are bound by the expression of intent, it should be deemed to be an advance contract even if it takes the form of a letter of intent or memorandum. In other words, the determination of whether an agreement between the parties to conclude a contract within a certain period of time constitutes an advance contract should depend on whether the agreement satisfies the requirements for the formation of a contract.
The Civil Code does not clearly stipulate the conditions for the formation of a contract, but since a contract is often concluded through an offer and an acceptance, and an acceptance is only an expression of intent to agree to the offer, the conditions for the establishment of an offer in the Civil Code can also be understood as the basic requirements of the Civil Code for the content of the contract. Article 472 of the Civil Code stipulates that the offeror shall be bound by the expression of intent if the content of the offer is specific and the content must be specified and the acceptance of the offeror shall be expressed. In practice, it is generally believed that if the parties reach an agreement on the subject matter and its quantity, the content of the contract can be determined to be specific and indicate that the parties must be bound by the expression of intent, and the contract is established. Since the reservation contract is a type of contract, the above conditions must naturally be met for its establishment. However, it is worth noting that the subject matter of the advance contract is to conclude the contract within a certain period of time in the future, so when determining whether the advance contract is established, the subject matter and quantity of the contract cannot be used as the criterion for determining whether the advance contract is established. In our view, as long as the parties agree to conclude a contract within a certain period of time in the future, and the subject matter and subject matter of the contract to be concluded in the future can be clarified, it can be determined that the content is specific and the parties must be bound by the expression of intent, and the general requirements for the formation of the contract are met, so that the reservation contract should be deemed to have been established. As for the quantity and price of the subject matter to be concluded in the future, the parties may wait until the signing of this contract to further negotiate. For this reason, this article stipulates that if the subject and subject matter of the contract to be concluded in the future can be determined based on the subscription letter, order letter, reservation letter, etc. signed by the parties, the reservation contract shall be deemed to have been established; On the other hand, if the letter of intent or memorandum signed by the parties only expresses the intention of the transaction, but does not stipulate that the contract will be concluded within a certain period of time in the future, or if there is an agreement but it is difficult to determine the subject and subject matter of the contract to be concluded in the future, the reservation contract cannot be deemed to have been established.
It should be noted that the agreement between the parties on the subject matter and its quantity is only a general condition for the formation of this contract, and under special circumstances, laws and administrative regulations may also take a specific form of the contract or the delivery of the subject matter as a special condition for the formation of this contract. In this case, will the advance contract concluded for the purpose of entering into this contract in the future also take a specific form or make the delivery of the subject matter a special condition for the formation of the advance contract? As far as the statutory form requirements are concerned, one opinion is that even if laws and administrative regulations stipulate that this contract must adopt a specific form, because of the independent nature of the advance contract, it is not necessary to adopt a specific form for the purpose of entering into this contract in the future. Another opinion is that only when the statutory form is to ensure the safety of the parties' transactions and urge the parties to trade prudently, the reservation contract must also adopt a specific form, but in the case where the statutory form is due to the needs of public administration or to facilitate publicity to third parties, it should not be considered that the reservation contract must also adopt the statutory form. In our view, since the laws and administrative regulations of the mainland clearly stipulate that the contract shall take a specific form, and its purpose is to urge the parties to trade prudently, in order to avoid the parties from evading the requirements of the laws and administrative regulations on the form of the contract through the advance contract, it seems that the advance contract signed for the purpose of entering into this contract in the future must also adopt a specific form. However, in a contract in rem, the delivery of the subject matter should not be used as a special requirement for the delivery of the subject matter in the event of a contract signed by the parties for the purpose of entering into this contract in the future, because once the subject matter is delivered, the contract can be established, not the advance contract. More on this later.
2. The distinction between the reservation contract and the contract
Although the conditions for the formation of a pre-contract are simpler than those of this contract, and only the parties and subject matter of the contract need to be specified, in practice, the content of many pre-contract contracts is also very comprehensive, not only including the conclusion of the contract within a certain period of time in the future, but also the parties, the subject matter and their quantity, price or remuneration have been agreed upon in this contract. The question is, if an advance contract has reached an agreement on the "elements" such as the subject matter and quantity of the contract, what is the difference between it and the contract? In this regard, one opinion holds that the difference between the reservation contract and the contract lies in the degree of clarity of the content of the contract: although the reservation contract has the main terms such as the subject matter, price or remuneration, it lacks the payment method, the method of guarantee, the establishment and the signing of the related contract, and so on, so it is not as detailed as the contract of this contract. There is some truth to this view. In the case of the same transaction, the reason why the parties entered into the advance contract first and then entered into the contract was because the conditions for entering into the contract directly were not met, and the reason why the conditions for entering into the contract directly were not met was because the parties had reached agreement on some major matters but had not yet reached agreement on other matters that the parties considered to be equally important, and thus left it to be negotiated at the time of the conclusion of the contract. In this regard, it is clear that the contract entered into in respect of the same transaction is more comprehensive and complete in content than the contract for appointment. The question is, if the parties have not entered into a reservation contract and a contract for the same transaction, but have only entered into an agreement, and there is a dispute as to whether the agreement is a contract or a contract for reservation, can the completeness of the content be judged? In our view, the core of determining whether the agreement between the parties is an advance contract or a non-legally binding transaction intention is whether the agreement between the parties is specifically determined in terms of content, because the reservation contract must have the requirements for the formation of the contract, but the distinction between the reservation contract and the contract does not seem to be based on the difference in the degree of clarity of the contract content, because the contract only needs to meet the requirements for the formation of the contract, and sometimes the content is very simple. From the perspective of the normative purpose of the advance contract, the key difference between the advance contract and this contract should be whether the parties have agreed that a separate contract must be concluded in the future before the transaction can be finalized. In other words, the reason why the reservation contract is different from the contract is that the parties intend to submit certain matters that still need further negotiation to the contract while reaching an agreement on the transaction, so that they retain the right to decide whether to finally complete the transaction. In this regard, in the case of a dispute over a housing sales contract between Chengdu Xunjie Communication Chain Co., Ltd. and Sichuan Shudu Industrial Co., Ltd. and Sichuan Youli Investment Holding Co., Ltd., the effective judgment rendered by the Supreme People's Court also expressed similar opinions: "There are various forms of appointments, and some of the reservation terms are very brief, which only express the intention of the parties to conclude this agreement in the future, and leave the content of this agreement to be determined through consultation at a later date; Some of the terms and conditions of the reservation are very detailed, and almost all of the content that should be stipulated in the future contract is clearly stipulated in the reservation. However, in terms of content alone, the latter is almost the same as this contract in terms of certainty in terms of content, and even if it lacks certain clauses, it can often be supplemented by means of contract interpretation. Therefore, it is not sufficient to distinguish between the appointment and the covenant based on whether the content of the agreement of the parties is comprehensive or not. The fundamental criterion for judging whether a contract concluded between the parties is a contract or an appointment should be the expression of intent of the parties, that is, whether the parties intend to enter into a new contract in the future, so as to finally clarify the specific content of a certain legal relationship between the parties. If the parties have a clear intention to conclude this agreement in the future, then even if the content of the reservation is very close to this agreement, and even if the entire content of this agreement can be deduced from the reservation through the interpretation of the contract, the expression of intention of the parties should be respected and the possibility of such an objective interpretation should be excluded. ”
It is worth noting that since the significance of the law recognizing the advance contract lies in the fact that the parties want to fix and give it legal binding force to the phased negotiation results on the one hand, and on the other hand want to retain the decision-making power on whether to finally complete the transaction, even if the parties agree to conclude a contract within a certain period of time in the future, if the parties have reached an agreement on the content that needs to be negotiated and agreed upon and have not reserved the opportunity for the parties to conclude a contract in the future, the agreement cannot be deemed to constitute a reservation contract, but should be deemed to constitute this contract. As for the agreement between the parties to conclude a contract within a certain period of time, it should be understood as the contractual obligations of the parties after the conclusion of this contract. For example, although the parties have reached an agreement through the bidding procedure, since article 46 of the Tendering and Bidding Law requires the parties to enter into a written contract within 30 days after the issuance of the notice of winning the bid, there is a dispute in practice as to when the winning contract is established. One opinion is that when the notice of winning the bid arrives at the bidder, the contract relationship between the parties is established, and only after the conclusion of the written contract can the contract relationship be formed between the parties. First, it is an obligation under the law that the parties should conclude a written contract within 30 days after the issuance of the notice of winning the bid, rather than an obligation agreed upon by the parties, and even if the parties have agreed on it in the bidding documents, it cannot change the statutory nature of the obligation. Second, although the parties should enter into a written contract within 30 days after the issuance of the notice of winning the bid, the written contract only re-expresses the content established in the bidding documents in the form of a contract, and although the parties can also make an agreement on the basis of consensus for the content outside the bidding documents, if the negotiation is inconsistent, a written contract shall be concluded according to the bidding documents first, and the lack of other contents can be solved by applying the rules of contract interpretation and the rules of filling in the loopholes in the contract. The parties did not reserve the opportunity to negotiate again. In this regard, when the notice of winning the bid reaches the bidder, it should be the contract of this contract and not the reservation contract, and the conclusion of the written contract should be understood as the legal obligation after the conclusion of the winning contract, rather than the conditions for the formation of the winning contract. Similarly, according to Article 10 of the Labor Contract Law, an employment relationship is established at the time of employment, and a written employment contract is only a legal obligation of the parties after the establishment of the employment relationship, rather than a requirement for the establishment of an employment contract. For another example, even if the parties agree in the contract for the sale and purchase of the house or the contract for the transfer of equity, in order to go through the transfer procedures, they must enter into a written contract or an online contract in accordance with the requirements of the registration agency or the administrative department, since the signing of the written contract or the online contract by the parties is a formality that must be completed for the performance of the contract for the sale and purchase of the house or the contract of equity transfer, etc., and should be the legal obligation of the parties in nature, the contract for the sale and purchase of the house or the contract for the transfer of equity cannot be understood as a reservation contract. The written contract or online contract signed in accordance with the requirements of the registration authority or administrative department shall be understood as this contract. In fact, when the parties entered into an agreement such as a house sale contract or an equity transfer contract, they had reached an agreement on all the contents that the parties needed to reach a consensus, and did not reserve the opportunity for further negotiation in the future to conclude a written contract or an online contract. In other words, even if the parties agree to enter into a written contract or sign a contract online in the future, it is not to retain the decision-making power on whether to finally complete the transaction, but to clarify the obligation of assistance that the parties should implement in order to complete the transaction.
In short, if there is evidence to prove that the parties have reached an agreement on all the contents that need to be negotiated and agreed upon, and from the perspective of contract interpretation, the parties have no intention of further negotiating when signing the contract in the future, the contract agreed by the parties to be concluded in the future should be understood as merely the parties requesting that the content of the contract be re-expressed in a specific form (such as a written contract) after the agreement has been reached in order to further clarify the relationship of rights and obligations, rather than entering into a separate contract. For this reason, paragraph 3 of this article stipulates that if the parties have reached an agreement on the main contents of the contract, such as the subject matter, quantity, price or remuneration, and meet the conditions for the formation of this contract, and the parties have not expressly agreed to conclude a separate contract within a certain period of time in the future, or if one of the parties has performed the act of performance and the other party has accepted the agreement, the people's court shall find that the contract is established. It can be seen that if the real intention is not to agree to conclude a separate contract within a certain period of time in the future, but only to re-express the agreement that has been reached in a specific form, the legal relationship between the parties should not be recognized as a pre-contractual relationship. In other words, if the parties have not expressly agreed to conclude a separate contract within a certain period of time in the future, it should be deemed that the contract between the parties has been established instead of an advance contract if the agreement between the parties has satisfied the conditions for the formation of this contract. In addition, according to the general doctrine of German civil law, when it is not possible to determine whether the parties' expression of intent is to conclude a reservation contract or a contract, it should also be presumed that a contractual relationship between the parties has been established. In this regard, the interpretation of the expression of intent is of great significance for the determination of the reservation contract.
3. Determination of the contract in rem or the contract in advance and the contract in advance
In a contract in rem, if the parties have reached an agreement but have not delivered the subject matter, is there a contractual relationship of appointment at this time? In this regard, Mr. Zheng Yubo, a scholar from mainland China, believes that the expression of the meaning of the contract in rem before the delivery of the subject matter must be interpreted as an appointment (such as the agreement of consumer loan and the agreement of sustenance). [7] In 1999, when the mainland Taiwan region amended its "Civil Code" debt section, it also adopted this viewpoint and amended the two essential contracts for use loans and consumer loans, and added reservation provisions. It is precisely for this reason that Professor Sui Pengsheng believes that in the material contract, the reservation and the contract are two successive legal relationships, the former arises from the agreement between the parties, and the latter is established by the new legal fact, that is, the delivery of the subject matter, so the performance of the reservation is the establishment of the contract. [8] The implication is that in a contract in rem, the parties first enter into a contract of appointment and then conclude the contract by way of conduct.
In our view, the above line of thinking is a misunderstanding of both the reservation contract and the material contract. The law stipulates that the delivery of the subject matter of a certain type of contract is a condition for the formation of the contract, and it is natural to consider that such a contract is extremely special, so that the agreement reached between the parties alone is not binding, and the agreement can only be binding on the parties after the parties have delivered the subject matter. In other words, the purpose of the contract in rem stipulated by law is nothing more than the delivery of the subject matter as a way to urge the parties to deal prudently. If it is considered that the agreement prior to the delivery of the subject matter has the effect of an advance contract, the purpose of the contract in rem provided by the law will naturally be frustrated. In particular, considering that the "Civil Code" of the mainland and Taiwan region allows for compulsory performance of the reservation, if it is considered that the parties must be bound by the reservation contract before delivering the subject matter, the parties have lost the freedom to conclude the contract after reaching an agreement. It is precisely for this reason that some scholars have criticized the amendment to the "Civil Code" of the mainland and Taiwan, arguing that identifying the agreement reached by the parties before the delivery of the subject matter as an appointment may lead to the parties losing the opportunity to choose whether to complete the transaction after the agreement is reached, and thus the purpose of the law stipulating such contracts as essential contracts cannot be realized. In this regard, the remedy of the "Civil Law" of the mainland and Taiwan is to allow the parties to cancel the appointment before the delivery of the subject matter under certain conditions. However, such a tortuous round trip is not in line with the original appearance of the reservation contract, nor is it conducive to the realization of the normative purpose of the material contract, because the reservation contract is an "agreement" of the parties to conclude this contract in the future, and the material contract is not that the parties agree to conclude the contract in the future, but that the contract itself must be established with the delivery of the subject matter as a condition, and even if the parties are allowed to cancel the reservation contract before the delivery of the subject matter under certain conditions, the normative purpose of the material contract cannot be fully realized.
In the same way, in a formal contract, it cannot be considered that the legal relationship between the parties when they reach an agreement but do not adopt the specific form prescribed by laws and administrative regulations constitutes a pre-contractual contract, because the specific form is an essential condition for the establishment of this contract, and if the parties do not adopt the specific formal requirements, it is only that the contractual contract is not established, but this does not mean that the pre-contractual relationship between the parties must be established. Unless the parties have entered into a separate advance contract and agreed to conclude this contract within a certain period of time in the future, it cannot be considered that the parties have formed an advance contract relationship before adopting a specific form. For example, in practice, many parties require the signing of a confirmation letter after reaching an agreement. To this end, paragraph 1 of Article 491 of the Civil Code stipulates that: "If the parties conclude a contract in the form of letters, data messages, etc., and request the signing of a confirmation document, the contract shall be formed when the confirmation is signed." It can be seen that the confirmation here is only an element for the formation of the contract, and the lack of the formal element of the confirmation will lead to the invalidity of the contract, rather than the establishment of the reservation contract but not the formation of the contract. Therefore, in practice, it is necessary to distinguish between the written contract, which is the carrier of this contract, and the confirmation here. This involves the interpretation of the expression of intent, i.e., whether the true intention of the parties is to conclude this contract in the future, or whether it is only required that the agreement reached be expressed in the form of a confirmation letter. In the case of the former, there is an appointment contractual relationship between the parties, but in the case of the latter, there is no appointment contract between the parties. If it is believed that the parties already had a contractual relationship before signing the confirmation, then the parties "have to" sign the confirmation after reaching an agreement, which is obviously inconsistent with the true intention of the parties, because the true meaning of the parties is that they are bound by the expression of intent only after they have signed the confirmation.
In short, the existence of an advance contract must be premised on the intention of the parties to enter into an advance contract, and if the parties only have the intention to enter into this contract, but not the intention to enter into an advance contract, they cannot be interpreted as a reservation contract. Regardless of whether it is a contract in rem or a formal contract, if the parties only have the intention to conclude the contract but do not have the intention to enter into a pre-contract contract, it cannot be considered that there is already a pre-contract relationship between the parties before the delivery of the subject matter or before the legal form is available.
However, in the case where the parties pay a deposit for the future conclusion of the contract, it should be interpreted as the existence of an advance contract relationship between the parties. Article 115 of the Judicial Interpretation of the Security Law stipulates that: "Where the parties agree to pay a deposit as security for the conclusion of the main contract, and the party who pays the deposit refuses to enter into the main contract, it shall not be entitled to demand the return of the deposit; If the party receiving the deposit refuses to conclude the contract, it shall return double the deposit. It should be pointed out that the "main contract" here refers to the contract that the parties have agreed to conclude in the future, so it is a contract, and this contract does not exist at the time of the delivery of the legislative deposit, so it cannot be the object of the deposit contract according to the subordinate nature of the guarantee. In our opinion, what can be eligible for a guarantee for a contract is an advance contract that stipulates that a contract will be concluded in the future. In other words, since the contract is a deposit to be paid to guarantee the conclusion of a contract in the future, once the parties pay the contract for the contract, it means that there is still a main contract between the parties with the content of concluding this contract within a certain period of time in the future, that is, the reservation contract. In this regard, the deposit is essentially a deposit for breach of contract in the advance contract. For this reason, this article stipulates that if a party has paid a deposit to guarantee the conclusion of a contract within a certain period of time in the future, and can determine the subject and subject matter of the contract to be concluded in the future, the people's court shall find that the reservation contract is established. In addition, Article 4 of the Judicial Interpretation on the Contract for the Sale and Purchase of Commodity Housing stipulates that: "If the seller accepts a deposit from the buyer as security for the conclusion of the contract for the sale and purchase of commercial housing by means of subscription, order, reservation, etc., if it fails to conclude the contract for the sale and purchase of commercial housing due to reasons attributable to one of the parties, it shall be handled in accordance with the provisions of the law on the deposit; If the contract for the sale and purchase of commercial housing cannot be concluded due to reasons not attributable to both parties, the seller shall return the deposit to the buyer. Obviously, the term "the seller accepts a deposit from the buyer by means of subscription, ordering, reservation, etc." indicates that there is an advance contract relationship between the parties, and the so-called "as a guarantee for the conclusion of a contract for the sale and purchase of commercial housing" means guaranteeing the performance of the contract for the sale of commercial housing.
4. Conversion of the reservation contract into this contract
It is generally believed that there are two reasons why the parties enter into this contract after entering into an advance contract. First, the conditions for entering into this contract are not yet ripe. For example, if the developer has not obtained a pre-sale license for commercial housing, if it directly signs a pre-sale contract or a sales contract for commercial housing, the contract will be deemed invalid according to the provisions of the Judicial Interpretation on Contracts for the Sale and Purchase of Commodity Housing. Second, although the parties have reached an agreement on the main content of the contract, they have not reached an agreement on all the contents of the contract, in order to fix the phased negotiation results and give them legal binding force, and at the same time retain the decision-making power on whether to finally complete the transaction, some parties choose to sign a reservation contract first, and then enter into this agreement after the two parties reach a consensus on all the contents of concern.
In the first case, since the parties chose to enter into the pre-contract first and then enter into the contract because the conditions for entering into the contract were not yet mature, would the pre-contract signed between the parties automatically be converted into the contract after the conditions for entering into the contract were ripe? For example, after the developer has obtained a pre-sale permit, can a previously concluded reservation contract be converted into a contract? In our opinion, the pre-contract only exists when the parties still have the right to make decisions on whether to sign the contract, and if the objective conditions are not mature at the time of the conclusion of the contract, and the contract will be established and effective once the conditions are fulfilled, then this situation should be understood as the contract has conditions for entry into force, and cannot be understood as the existence of a pre-contract relationship between the parties. In the case that the developer has not yet obtained the pre-sale license and signs a reservation contract, one of the parties can only request the other party to enter into a commercial housing pre-sale contract or a sales contract after the developer has obtained the pre-sale license, and cannot directly request the other party to perform the commercial housing pre-sale contract or sales contract, so the reservation contract should not be deemed invalid. It is precisely for this reason that even if the developer obtains a pre-sale permit afterwards, the reservation contract cannot be automatically converted into this contract, and the parties are required to enter into a commercial housing pre-sale contract or a sales contract based on the reservation contract. That is to say, after the reservation contract is established and takes effect, even if the developer has obtained the pre-sale license, the parties still have the final decision-making power on whether to sign the pre-sale contract or the sales contract of the commercial housing, otherwise the reservation contract will be used by the parties to circumvent the provisions of laws and administrative regulations on the pre-sale of commercial housing that must obtain a pre-sale license.
In the case that the parties sign an advance contract for the purpose of entering into a commercial housing pre-sale contract or a sales contract within a certain period of time in the future, although the reservation contract is not automatically converted into this contract because the developer obtains a pre-sale license, some scholars believe that according to Article 5 of the Judicial Interpretation of the Judicial Interpretation on the Sale and Purchase Contract of Commodity Housing, "the agreement on the subscription, ordering, and reservation of commercial housing has the main content of the commercial housing sales contract as stipulated in Article 16 of the Administrative Measures for the Sales of Commodity Housing, and the seller has already accepted the purchase price in accordance with the agreement, The agreement shall be deemed to be a contract for the sale and purchase of commercial housing", and the reservation contract can still be converted into this contract under certain circumstances. It should be pointed out that the fact that the agreement on the subscription, order, and reservation of commercial housing has the main content of the contract for the sale and purchase of commercial housing as stipulated in Article 16 of the Administrative Measures for the Sales of Commodity Housing is not the key point that the agreement can be recognized as a contract rather than an appointment contract, because the reservation contract must also have the requirements for the establishment of the contract. Therefore, Article 5 of the Judicial Interpretation on the Contract for the Sale and Purchase of Commodity Housing means that even if the agreement on the subscription, order, reservation and other agreements of the commercial housing is only a reservation contract and not a contract in nature, the reservation contract has been transformed into a contract under the circumstance that "the seller has already accepted the purchase price in accordance with the agreement".
The question is, why is it that "the seller has accepted the purchase price as agreed" can convert the reservation contract into this contract? Obviously, the subject matter of the reservation contract is to conclude this contract in the future, so the act of accepting the purchase price is not an act of performing the reservation contract, but an act of performing the contract of this contract, that is, the contract for the sale and purchase of commercial housing. Although the parties must still sign this contract after the reservation contract is formed and takes effect in order to finally complete the transaction, according to Article 135 of the Civil Code, the conclusion of this contract can be in writing, oral or other forms. Article 18 of the Judicial Interpretation of the General Provisions of the Civil Code provides: "Where a party has not adopted written or oral form, but the act itself indicates that it has made a corresponding expression of intent and meets the requirements for the establishment of a civil juristic act, the people's court may find that it is a civil juristic act carried out in other forms as provided for in Article 135 of the Civil Code." Accordingly, although the agreement between the parties is only an advance contract, but the conduct carried out by the parties afterwards is sufficient to show that they have made an expression of intent to conclude this contract, and the conditions for the formation of this contract are met, then this contract has naturally been established. For example, in the above-mentioned case of Chengdu Xunjie Communication Chain Co., Ltd., Sichuan Shudu Industrial Co., Ltd., and Sichuan Youli Investment Holding Co., Ltd., although the effective judgment rendered by the Supreme People's Court held that the house purchase agreement signed between the parties should be a reservation contract in nature, it also pointed out that "in light of the fact that the parties performed after the conclusion of the House Purchase Agreement, a legal relationship for the sale and purchase of houses has been established between Shudu Industrial Company and Xunjie Company", on the grounds that: " As to whether there is an appointment or a contractual relationship between the parties, it is not possible to simply determine whether there is an isolated agreement, but should comprehensively examine the content of the relevant agreement, the subsequent negotiations and even specific performance acts of the parties to conclude the transaction, and explore the true intentions of the parties, and make an accurate definition of the nature of the legal relationship between the parties accordingly. In this case, when the parties signed the House Purchase Agreement, Xunjie Company had actually paid the deposit and agreed to automatically convert it into the purchase price under certain conditions, and Shudu Industrial Company also accepted the delivery of Xunjie. More than three months after the signing of the House Purchase Agreement, Shudu Industrial Company delivered the house under the contract to Xunjie, and Xunjie accepted the delivery. According to the pre-appointment nature of the House Purchase Agreement, Shudu Industrial Company's act of delivering the house should not be regarded as the performance of the contract, and in the absence of other legal relationships between the parties such as leasing and other paid use of the house, Shudu Industrial Company's act should be deemed to be based on the delivery of the house sale relationship with Xunjie. Accordingly, since the main obligation of Shudu Industrial Company in the legal relationship of housing sale and purchase is to deliver the house involved in the case, according to the provisions of Articles 36 and 37 of the Contract Law, it can be determined that the parties have reached an agreement to buy and sell the house, and a legal relationship of housing sale and purchase has been established. ”
It is worth noting that since Article 41 of the Urban Real Estate Management Law clearly stipulates that a written contract shall be signed for the transfer of real estate, it will still face formal obstacles when determining whether the parties have entered into this contract by act after the conclusion of the reservation contract. However, according to paragraph 2 of Article 490 of the Civil Code, which stipulates that "a contract shall be concluded in written form as stipulated by laws and administrative regulations or agreed by the parties, and the parties do not use the written form but one party has performed its main obligations and the other party accepts it, the contract shall be established", even if the parties have not entered into a house sale contract (this contract) in written form, if one party has fulfilled its main obligations, the house sale contract (this contract) shall be formed when the other party accepts it. In this regard, the "seller has accepted the purchase price in accordance with the agreement" as stipulated in Article 5 of the Judicial Interpretation on the Contract for the Sale and Purchase of Commercial Housing should fall under the circumstances referred to in "one party has fulfilled its main obligations and the other party has accepted".
Similarly, if laws and administrative regulations do not stipulate that this contract shall be in a specific form, but the parties agree that this contract shall be in written form, even if the parties have not entered into this contract in written form after the conclusion of the reservation contract, if one party has fulfilled its main obligations, the contract shall be formed when the other party accepts it. In addition, if there are no special provisions on the form of the contract in laws and administrative regulations, and there is no special agreement on the form of the contract between the parties, the contract shall be deemed to have been concluded as long as the acts performed by the parties after the conclusion of the reservation contract are sufficient to show that they have made the intention to conclude the contract, and it is not necessary to require one party to perform the main obligations and the other party to accept it.
In short, in the event that the parties enter into an advance contract first because the conditions for concluding this contract are not ripe, even if the conditions are ripe afterwards, the advance contract cannot be directly converted into this contract, and the parties still need to reach an agreement on the conclusion of this contract. However, if there are no special provisions on the form of the contract in laws and administrative regulations or there is no special agreement on the form of the contract between the parties, the act carried out by the parties after the conclusion of the reservation contract indicates their intention to enter into this contract, the contract shall be deemed to have been established; Even if there are special provisions on the form of contract in laws and administrative regulations or when the parties have special agreement on the form of contract, if one of the parties has fulfilled its main obligations, the contract has been formed when the other party accepts it. Of course, strictly speaking, it is not appropriate to describe such a situation by "the transformation of the advance contract into the present contract", because in the above case, it is not the advance contract that is transformed into the present contract, but the parties who have entered into the contract by conduct. For this reason, this article stipulates that if the parties have reached an agreement on the main contents of the contract, such as the subject matter, quantity, price or remuneration, and meet the conditions for the formation of this contract, although the parties have expressly agreed to conclude a separate contract within a certain period of time in the future, but one of the parties has performed and the other party has accepted it, the people's court shall find that this contract is established.
[Practical issues]
In practice, there is a view that the application of reservation contracts in practice is relatively rare, and usually only exists in the process of pre-sale of commercial housing; There is also a view that in the case of a contract in rem (a practical contract), if the parties only reach an agreement but do not deliver the subject matter, it should be deemed that there is a contractual relationship between the parties in advance. In our view, the advance contract is a product of the phased transaction and widely exists in complex transactions, and the parties want to fix the phased negotiation results and give the reached agreement legally binding, but at the same time reserve the right to renegotiate the content that is not agreed. In particular, according to the transaction arrangement between the parties, it is more common for the parties to stipulate that one party is obliged to enter into a contract with a third party designated by the other party within a certain period of time in the future. In addition, when the parties pay a deposit to secure the conclusion of a contract in the future, the fact of the payment of the deposit is sufficient to prove that the parties have agreed to conclude the contract within a certain period of time in the future, even though the parties have not signed a written document agreeing to conclude the contract within a certain period of time in the future. It can be seen that the pre-appointment contract is widely used in practice. In practice, the use of reservation contracts is rare, which may be due to the fact that the parties do not use the form of subscription, order, reservation, etc., so that when dealing with the disputes arising therefrom, the adjudicator does not realize that there is an appointment contract relationship between the parties. Of course, in a contract in rem, it is worth exploring whether the parties have an appointment contract relationship before delivering the subject matter. In addition, in the pre-sale of commercial housing, it is also worth noting that most of the parties are already in this contract relationship, rather than an appointment contract relationship. These problems have been analyzed above and will not be repeated here.
It should be noted that when the parties agree to sign a "formal contract" in the future, there may be the following three situations according to the true intention of the parties: first, the "formal contract" agreed upon by the parties is only the contractual obligations of the parties after the conclusion of this contract, and the conclusion of an agreement between the parties but not the signing of a formal contract does not affect the formation of this contract; Second, the "formal contract" agreed upon by the parties is a confirmation document as provided for in paragraph 1 of Article 491 of the Civil Code, and although the parties have reached an agreement but have not signed the confirmation letter, the contract will not be established and there will be no pre-contractual relationship between the parties. Third, the "formal contract" agreed upon by the parties refers to the contract to be concluded in the future, and if the parties reach an agreement but do not sign a formal contract, this contract will only be invalidated, and will not affect the establishment of the contractual relationship. It can be seen that when the parties agree to sign a "formal contract" in the future, the legal relationship between the parties should be judged according to the true intention of the parties.