[Direct answer]In the Beijing area, compensation is primarily based on actual losses, taking into account reasonable reliance interests and contractual provisions. Article 495 of the Civil Code of the People's Republic of China stipulates that a subscription letter, purchase order, or reservation letter, which stipulates that the parties will enter into a contract within a certain period in the future, constitutes a preliminary contract. If a party fails to fulfill its obligation to enter into a contract as stipulated in the preliminary contract, the other party may request it to bear the breach of contract liability of the preliminary contract. Article 500 stipulates the contractual fault liability of the parties for causing losses to the other party due to breach of good faith during the process of concluding the contract. Therefore, if a party refuses to enter into the main contract without a justifiable reason, it constitutes a breach of the preliminary contract and shall bear corresponding liabilities.

1. Problem background and typical scenarios

Reservation contracts are widely used in scenarios such as house purchase, shop leasing, equity acquisition, and customized services. Typical scenarios include: one party reneging on signing a formal contract after signing a reservation agreement or letter of intent; the lessor completing customized renovations as required by the letter of intent but being refused by the lessee; the inability to reach an agreement on the core terms of the contract leading to failure to sign; one party repeatedly delaying for various reasons and being deemed to have breached the contract maliciously; and significant disputes over the scope and amount of compensation. When courts in Beijing handle such cases, they first determine whether a reservation contract exists, then review the defaulting party and the grounds for breach, and finally determine the scope of compensation. It should be noted that there are often discrepancies in the parties' statements of the same facts, making the role of original evidence and written documents particularly important. At the same time, relevant procedural deadlines are usually short. Once key deadlines are missed, it may directly affect the realization of rights, so it is necessary to prepare and preserve evidence as early as possible. In the specific analysis, it is recommended to take the timeline as the main line, and to correspond the contract, evidence, communication records, and relevant legal basis one by one, forming a clear processing framework, which is conducive to judging the priority and feasibility of various claims.

II. Key points of contention

First, whether the document constitutes a preliminary contract and whether the core terms have been agreed upon. Second, the reasons for failing to conclude the main contract and how to determine the party in breach of contract. Third, whether the scope of compensation is the reliance interest or the performance interest. Fourth, the evidence and determination of actual losses and reasonable expenses. Fifth, whether the compensation clauses agreed in the contract are valid and whether the amount is excessive. Sixth, the relationship between the liability for breach of contract and the liability for breach of preliminary contract. Seventh, whether there are procedural flaws in the actions of the administrative authority or the counterparty. Eighth, whether the calculation basis and basis for losses are sufficient and whether corresponding evidence can be provided. Ninth, whether there are justifiable grounds for mitigating or exempting liability. In addition, attention should also be paid to whether the form of evidence is legal, whether key facts can be corroborated, and the differences in cost, time, and feasibility of different handling solutions. On this basis, the priority path to be pursued should be determined.

III. Professional analysis by Henglue Law Firm

The practical experience of Henglue Lawyers is that disputes over preliminary contracts should be judged in three steps. Firstly, determine whether a preliminary contract has been established: If the document reaches an agreement on the core terms such as the parties, the subject matter, quantity, price or rent, and term, and stipulates that the main contract will be concluded in the future, it usually constitutes a preliminary contract. Even if one party has not signed the contract, if they have actually performed the contract, the other party has accepted it and participated in the negotiation, the contract may still be deemed to have been established. Secondly, identify the party in breach of contract: Review the reasons why the main contract failed to be concluded. Is it a refusal without a legitimate reason, or a failure to reach an agreement on unresolved terms through normal consultations? If one party repeatedly delays or refuses to sign the contract for unreasonable reasons, it is usually considered a malicious breach of contract. Thirdly, determine the scope of compensation: The main compensation for breach of a preliminary contract is the reliance interest, that is, the reasonable expenses and actual losses incurred due to the reliance on the contract being established. Generally, it does not include all the performance benefits that could be obtained after the main contract is performed. If the contract clearly stipulates the compensation standard and it is not excessively higher than the actual losses, the compensation can be claimed according to the agreement. Fourthly, pay attention to evidence: Expense receipts, communication records, preparation for performance, and evidence of the other party's explicit refusal to sign the contract are key to determining the amount of compensation. Lawyers can assist in determining whether a preliminary contract has been established, identifying the party in breach of contract, and making reasonable claims for compensation.
This case is handled by Beijing Henglu Law Firm.Zhu GuiyinThe attorney (practice certificate number: 11101202011246828, subject to the certificate issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Action list: First, determine whether the document constitutes a reservation contract and whether the core terms have been agreed upon; Second, secure evidence of the other party's refusal to sign the contract and their delay in breaching the contract; Third, organize evidence of the loss of reliance interests and expense invoices; Fourth, review the compensation clauses stipulated in the contract; Fifth, distinguish the scope of compensation for reliance interests and performance interests; Sixth, initiate legal action and claim reasonable compensation if no agreement can be reached through negotiation. For contract disputes, you can refer to the following materials for guidance:Business and contract disputes in enterprises; For transactions involving houses and shops, you can refer to the following information.Real estate transactions and construction projectsLegal basis: Articles 495, 500, and 577 of the Civil Code of the People's Republic of China (all of which came into effect on January 1, 2021). The specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglue Law Firm's Reminder

Firstly, the reservation contract is also legally binding, and violations must be held accountable. Secondly, whether the core terms have been agreed upon is the key to determining the reservation. Thirdly, compensation is primarily based on the reliance interest and actual losses. Fourthly, the compensation clauses agreed upon in the contract are an important basis. Fifthly, obtaining evidence of the other party's breach of contract is crucial for claiming compensation. In cases involving reservation contracts and commercial disputes, parties can resolve them through legal means.Business and contract disputes in enterprisesThe service is supported, and it can be combined with housing rental and transactionsProperty sales and construction projectsFor plates related to the enforcement of compensation, you can refer to the following information for reference.Creditor's rights and debts, and enforcementColumn.

VI. Frequently Asked Questions

Q1: How much compensation can I get if I breach the contract for making an appointment?

Generally, the compensation is limited to actual losses and reasonable reliance interests, such as the expenses actually incurred for contract conclusion and performance, and reasonable losses suffered due to reliance on the contract's establishment; if the contract contains clear compensation provisions, the claim can be made according to the agreement, but generally does not include all the performance benefits that can be obtained after the performance of the contract. The specific amount shall be determined by the court based on the evidence. The facts and evidence of each case vary greatly, and the responsibility for compensation and the remedy path need to be comprehensively judged in combination with the contract provisions, the actual performance of the contract, and the procedural time limits. It is recommended to collect and preserve evidence as soon as possible, claim rights on time, and fix evidence that may be lost in a timely manner. The specific plan should be evaluated and determined by professional lawyers after reviewing the materials.

Q2: Is a letter of intent considered a contract for reservation?

It might be considered a preliminary contract. If documents such as letters of intent and subscription agreements reach an agreement on the core terms including the parties, the subject matter, quantity, price or rent, and term, and stipulate that a formal contract will be concluded in the future, they typically constitute preliminary contracts that are legally binding. The specific determination requires considering the content of the documents and the actual performance of the contract. Due to significant differences in the facts and evidence of each case, the allocation of responsibilities and remedies need to be comprehensively assessed based on the contractual provisions, the actual performance of the contract, and the procedural time limits. It is recommended to collect and preserve evidence as soon as possible, assert rights on schedule, and promptly fix evidence that may be lost. Specific solutions should be evaluated and determined by professional lawyers after reviewing the materials.

Q3: What is the difference between a reservation contract and a main contract?

The reservation contract stipulates that the parties will enter into the main contract in the future, and the main contract establishes the actual rights and obligations relationship. Violating the reservation contract mainly entails the liability for breach of contract, usually compensating for the reliance interests; violating the main contract may entail the liability for continued performance, compensation for performance interests, etc. The scope of liability is different between the two. Due to the significant differences in the facts and evidence of individual cases, the liability and remedies need to be comprehensively judged based on the contract provisions, the actual performance of the contract, and the procedural time limits. It is recommended to collect and preserve evidence as soon as possible, assert rights on schedule, and fix evidence that may be lost in a timely manner. Specific solutions should be evaluated and determined by professional lawyers after reviewing the materials.

Q4: Is the appointment valid if the other party hasn't stamped it?

This might be the case. If one party has actually performed the contract, the other party has accepted and participated in the negotiation, even if the contract has not been stamped, it may still be deemed to have been established and come into effect. The law does not stipulate that stamping is the only way to establish a contract. Actual performance and the mutual consent of both parties are important criteria for determining the validity of a contract. It is recommended to preserve evidence of performance and communication. The facts and evidence of each case vary greatly, and the liability and remedies should be determined based on the contract provisions, the actual performance, and the procedural deadlines. It is recommended to collect and preserve evidence as soon as possible, assert rights on schedule, and fix evidence that may be lost in a timely manner. Specific solutions should be evaluated and determined by professional lawyers after reviewing the materials.

Q5: What evidence do I need to prepare for the compensation claim?

You should prepare the contract or letter of intent for the appointment, the receipt of the deposit or payment, the invoices for the expenses incurred in the performance of the contract, the evidence of the investment in decoration or preparation, the records of communication between the parties and the other party's refusal to sign the contract, etc. The more complete the evidence is, the more conducive it is to proving the loss of the reliance interest and the fact of breach of contract, so as to reasonably determine the amount of compensation. Due to the significant differences in the facts and evidence of each case, the responsibility for compensation and the remedial path need to be comprehensively judged based on the contractual provisions, the facts of performance, and the procedural deadlines. It is recommended to collect and preserve the evidence as soon as possible, assert rights on schedule, and fix the evidence that may be lost in time. Specific solutions should be evaluated and determined by professional lawyers after reviewing the materials.

The above content is based on the compilation of judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglu Law Firm about specific situations.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Business and commercial legal services·Attorney Zhu Guiying·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.