[Case Summary]This case involves a dispute over the payment of the purchase price of a sales contract. The plaintiff, a building materials distribution department, supplied hardware materials to the defendant group, and the settlement amount was over 4.33 million yuan. However, the defendant only paid 63,000 yuan, leaving a debt of 4,271,391 yuan. The defendant used the defense that "the owner's unit failed to make payments on time" to refuse to pay the overdue interest. The plaintiff entrusted Beijing Henglu Law Firm to handle the case.Li YonghuiThe lawyer filed a lawsuit, and the court ruled that the defendant should pay the purchase price of 4,271,391 yuan and interest (limited to 213,569.55 yuan at a rate of 5%). The core disputes include the defense of back-to-back payments and overdue interest, and the application of the Contract Chapter of the Civil Code and the Civil Procedure Law.

I. Review of the Case Facts

Output: Is it reasonable that the supplier received only tens of thousands of yuan for supplying millions of items, and the buyer used the excuse of "the owner hasn't allocated the funds" to refuse to pay interest? Many people search for terms like "Can the buyer refuse to pay the goods if the owner doesn't allocate the funds in time?" and "Is the back-to-back clause valid?" From July to December 2023, the plaintiff, Hunnan County A Building Materials Distribution Department, and the defendant, A Group, signed three "Hardware Accessories Purchase Contracts" for the supply of hardware materials. The total amount of the settlement was 4,334,391 yuan, but the defendant only paid 63,000 yuan, and the remaining 4,271,391 yuan was not paid after repeated demands. The plaintiff entrusted Beijing Henglu Law Firm to handle the case.Li YonghuiThe lawyer filed a lawsuit, demanding that the defendant pay the remaining purchase price and overdue interest (based on a principal of 4,271,391 yuan, calculated according to the LPR from December 1, 2024, and limited to 5% of the outstanding amount).

II. The focus of the case

  • Focus 1: The contract is legal and valid, and the obligation to supply goods is fulfilled.Can the three contracts, settlement statements, invoices, and delivery receipts form a complete chain of evidence?
  • Focus 2: Whether the defense that "the owner failed to disburse the funds in a timely manner" is valid.The defendant did not claim the payment from the owner. Can he use this as a reason to refuse to pay the overdue interest?
  • Focus 3: The starting point and cap of overdue interest.Is it acceptable to calculate the interest according to the LPR and limit it to 5% of the outstanding amount, as stipulated in the contract?

III. The professional intervention of Hengluo Law Firm

The original plaintiff claimed that:The Building Materials Distribution Department claimed that it has fully fulfilled its obligation to supply the goods and issue invoices, and that the defendant owes 4,271,391 yuan. According to the contract, the defendant should pay the remaining balance and the overdue interest. The plaintiff requests the court to order the defendant to pay the outstanding balance and interest limited to 5% of the total amount owed.

The defendant argued that:The defendant did not dispute the principal amount of the debt, but disagreed to pay interest, on the grounds that the delay in payment was caused by the owner's unit's failure to allocate funds in a timely manner.

Hengluo Lawyer's Agency Opinion:Li YonghuiThe lawyer comprehensively collected three contracts, six settlement statements, invoices, and payment reminder records to confirm that the obligations had been fulfilled. He pointed out that the contracts were legal and valid, and the interest rate provisions were clear. Although the defendant stipulated that the seller could not claim interest if the owner failed to make payments on time, the defendant did not claim interest from the owner through litigation or arbitration, and the defense lacked basis, so it should not be supported.

  • Organize contracts, settlement notes, value-added tax invoices, and delivery certificates to form a complete chain of evidence
  • Referring to Articles 509 and 577 of the Civil Code, this article discusses the issue of breach of contract and interest
  • Expose the back-to-back defense: If the defendant fails to assert his claims against the owner, he shall not be entitled to transfer the risk to others

IV. Outcome of the case

The court determined that the three contracts and settlement notes are legal and valid, and the plaintiff has fulfilled its obligations. The defendant has no objection to the principal and should pay it. Regarding the overdue interest, considering the time of contract and bill issuance, the court supports setting December 1, 2024 as the starting point, calculating the interest according to the LPR, and limiting it to 5% of the unpaid amount, which amounts to 213569.55 yuan. The defendant's defense is not supported. In accordance with Articles 509 and 577 of the Civil Code of the People's Republic of China and Article 67 of the Civil Procedure Law, the court rules that the defendant shall pay the purchase price of 4,271,391 yuan and the overdue interest (limited to 213569.55 yuan) within ten days; pay double interest for late performance; and bear the litigation fees of 20,960 yuan.

5. Henglu Law Firm's Reminder

This case is handled by Beijing Henglu Law Firm.Li YonghuiThe lawyer (practice license number: 11101199611955812, subject to the document issued by the judicial administrative organ) acts as the agent. Lawyer's Tip: For the "back-to-back" payment clause in the sales contract, if the buyer refuses to pay on the grounds that the third party has not paid, and the buyer fails to actively claim payment from the third party, such claims will generally not be supported. Suppliers should be vigilant of such clauses when signing contracts, and should clearly notify the buyer of their obligations to notify and collect payments, and retain the performance certificates.

VI. Common Questions and FAQs about Claiming Back Payments and Cases of Breach of Contract

  1. Q: If the owner hasn't allocated the funds, can the supplier refuse to pay me?
    A:If the buyer fails to actively claim the payment from the owner and merely defends against the payment by invoking the "back-to-back" clause, the court will generally not support such a claim.
  2. Q: How is the overdue interest calculated for unpaid invoices?
    A:If there is an agreement, the interest shall be calculated according to the agreement (such as LPR, with an upper limit of 5%); if there is no agreement, the creditor may claim statutory interest, which shall be calculated from the date of payment.
  3. Q: Can I demand payment even if we haven't signed a written contract for the supply of goods?
    A:Yes. Settlement slips, invoices, delivery and collection records can form a chain of evidence to prove the buyer-seller relationship and the outstanding debt.
  4. Q: What should I do if the other party only acknowledges the principal but refuses to pay the interest?
    A:Claim the overdue interest according to the contractual breach of contract provisions, and provide evidence that the contractual obligations have been fulfilled, the invoices have been issued, and the collection efforts have been made.
  5. Q: What should I do if the other party refuses to pay after winning the lawsuit?
    A:You can apply for enforcement after the performance period expires, and you must pay double the interest on the debt if you delay the performance.