[Case Summary]This case involvesHeating supply and utilization contractDispute. On October 6, 2017, the plaintiff heating company and the defendant commercial management company signed an urban heat supply and utilization contract, stipulating that the charging area was 142095.238 square meters, the nature of heat use was commercial, the heating period was from October 1 to April 30 of the following year, and the defaulter would pay a penalty of 0.3% of the unpaid amount per day (up to a maximum of twice the principal) and bear the collection fees including attorney's fees. The defendant failed to pay the heating fees from October 12, 2021 to April 30, 2022. The plaintiff entrusted Beijing Henglu Law Firm to handle the case.Su BenkaiThe lawyer represented the client, asserting that the contract was valid and that the defendant's failure to pay the fees constituted a breach of contract, and refuted the defendant's claim that the excessively high heating fees should be offset (which did not meet the requirements for the right of set-off). The court ruled that the defendant should pay heating fees of 3,303,198.86 yuan, default penalties calculated at 1.3 times the LPR rate, and attorney's fees of 100,000 yuan. The core disputes were the dispute over the heating price and the excessively high heating fees, and the dispute over the default penalties and the bearing of attorney's fees. The applicable legal provisions were the relevant provisions of the Civil Code and the Civil Procedure Law.

I. Review of the Case Facts

How to deal with arrears in heating fees? How is the penalty for heating fees calculated? These are common issues that heating companies face when protecting their rights. On October 6, 2017, the plaintiff heating company and the defendant commercial management company signed an urban heating supply and use contract, which stipulated that the building area was 96,720.51 square meters, the super-high area was 45,374.728 square meters, and the heating area was 142,095.238 square meters. The nature of the heating was commercial. The plaintiff provided heating to the defendant within the heating period stipulated by the local government, with the heating period starting from October 1 and ending on April 30 of the following year. The heating fees were charged according to the price standards approved by the government price authorities. If the defendant still failed to pay the heating fees in full by the deadline of December 31 of each year after being reminded, the defendant should bear the responsibility of paying the heating fee principal and the penalty for the heating fees in addition to that.

The heating fee penalty shall be calculated from October 1st of the heating period to the date of payment, with a daily charge of 0.3% of the outstanding heating fee, subject to a maximum amount not exceeding twice the principal, and the defendant shall bear the expenses incurred by the plaintiff in urging the payment of the heating fee (including litigation fees, attorney fees, etc.). However, the defendant failed to pay the 2021 heating fee. After the plaintiff urged the defendant to pay the heating fee several times, the defendant still has not paid the heating fee for the period from October 12, 2021 to April 30, 2022, so the plaintiff filed a lawsuit and requested: 1. The defendant to pay the heating fee of 3,303,199.21 yuan; 2. The defendant to pay the penalty; 3. The defendant to pay the attorney fees; 4. The defendant to bear the litigation fees.

II. The focus of the case

  • Focus 1: Is it legal to charge such exorbitant fees for heating?The defendant claimed that the plaintiff had no right to set prices unilaterally and that the excessive heating fees were in violation of regulations. Could the defendant overturn the contract and the government's pricing basis?
  • Focus II: Can the excessively high heating fees that have been paid be offset against the heating fees in this case?The defendant claimed that the excessively high fuel charges charged were sufficient to offset the losses. Does this comply with the requirements of the debtor's right of set-off?
  • Focus Three: Whether the breach of contract penalty and attorney's fees should be supported.The defendant's failure to pay the fees constitutes a breach of contract. Whether the court will support the plaintiff's claim for breach of contract damages and attorney's fees depends on the contract terms.

III. The professional intervention of Hengluo Law Firm

The plaintiff (the heating company) alleged that:The plaintiff alleges that the defendant owes 3,303,199.21 yuan in heating fees for the 2021 fiscal year and requests payment of the heating fees, the breach of contract penalties, the attorney's fees, and the litigation costs.

The defendant (the commercial management company) argued that:The defendant disagrees with the plaintiff's claims and argues that: 1. The plaintiff does not have the right to unilaterally determine the price and calculation standards; 2. Charging excessively high heating fees violates the law and the contract; 3. The excessively high heating fees charged are sufficient to offset the heating fees, and the plaintiff should actually owe the defendant money; 4. The defendant should not bear breach of contract liability and attorney's fees.

Hengluo Lawyer's Agency Opinion:Su BenkaiAfter receiving the client's entrustment, the lawyer first communicated with the client to sort out the evidence materials and check the local heating price policies for price calculation, then submitted evidence such as the heating business license, urban heating supply and use contracts, price adjustment announcements, payment notices, and entrustment agency contracts. The lawyer held that the heating supply and use contract signed by the two parties was a true expression of their intention and did not violate any prohibitive provisions of the law, thus being legal and valid. The defendant failed to pay the outstanding heating fees within the agreed time limit, and the plaintiff has fulfilled its obligation to urge payment. Therefore, the plaintiff's claims should be supported. Regarding the issue of offsetting the overpaid heating fees, it does not meet the requirements for the debtor to exercise the right of offsetting, and should not be dealt with in this case. Regarding the penalty and attorney's fees, the defendant's default in payment constitutes a breach of contract, and the claim for attorney's fees meets the contractual provisions and does not exceed the guiding fee standards for attorney's services, so they are all supported.

IV. Outcome of the case

Court judgment: 1. The defendant shall, within ten days from the effective date of this judgment, pay the plaintiff the heating fees owed from October 12, 2021 to April 30, 2022, totaling 3,303,198.86 yuan, and shall pay the default penalty calculated at 1.3 times the lending market quotation rate announced by the National Interbank Funding Center, based on the principal of 3,303,198.86 yuan, from October 12, 2021 to the date of actual payment; 2. The defendant shall, within ten days from the effective date of this judgment, pay the plaintiff the attorney's fees of 100,000 yuan incurred by the plaintiff in enforcing the creditor's rights; 3. The plaintiff's other claims are dismissed; 4. The case acceptance fee of 21,772.3 yuan shall be borne by the defendant.

5. Henglu Law Firm's Reminder

This case is handled by Beijing Henglu Law Firm.Su BenkaiAttorney (Practice Certificate No.: 11101202110375397, subject to the document issued by the judicial administrative organ). Attorney's Reminder: Heating enterprises should sign standard heating supply and use contracts, clarifying the price basis, the breach of contract penalty, and the responsibility for legal protection costs; the party in arrears claiming to offset the overcharged fees must meet the statutory conditions for the right of offset, and cannot deduct them automatically. In the event of disputes over "arrears in heating fees" and "heating fee breach of contract penalties", it is recommended to entrust professional lawyers to fix the contract and government pricing evidence for legal protection.

VI. Common Questions and Answers for Special Contract Cases

  1. Q: Can commercial users be sued for unpaid heating bills?
    A:Yes, the heat supply contract is legal and valid. The party in arrears constitutes a breach of contract, and the heating company can request the payment of the heating fee, the breach of contract penalty, and the legal defense costs.
  2. Q: Is it legal to calculate the heating fee penalty at 0.3% per day?
    A:The agreed penalty for breach of contract is generally valid if it does not violate mandatory provisions, but if it is too high, it may be adjusted. In this case, it is calculated at 1.3 times the LPR, which is in line with the judicial guidance.
  3. Q: The other party said that they charged an excessively high fee and want to offset it. Is that reasonable?
    A:Offsetting must comply with statutory conditions. Only if the claim is based on the same contract and is valid, can it be deducted in this case. Otherwise, it should be handled through separate litigation.
  4. Q: Can the losing party be made to bear the attorney's fees?
    A:If the contract clearly stipulates that the breaching party shall bear the cost of protecting rights (including attorney's fees) and the fees are reasonable, the court will generally support it.
  5. Q: What evidence do I need to prepare for a heating dispute?
    A:The following documents should be collected: heating supply contracts, heating price announcements, payment notifications, arrears collection records, and power of attorney contracts. It is also advisable to consult a professional lawyer as soon as possible.