[Direct answer]In the Beijing area, if the party in breach of contract itself is at fault for the occurrence of losses, the other party may correspondingly reduce the compensation. According to Article 592 of the Civil Code of the People's Republic of China (effective January 1, 2021), if a party in breach of contract causes losses to the other party, and the other party is at fault for the occurrence of the losses, the corresponding amount of compensation for the losses may be reduced; if both parties breach the contract, they shall bear corresponding responsibilities respectively. That is to say, even if the other party is in breach of contract, if the party in breach of contract is at fault for the occurrence of the losses, such as failing to cooperate as agreed, failing to provide necessary conditions, knowing the risks but allowing them to occur, or failing to fulfill the obligation of assistance resulting in the expansion of the losses, the court may reduce the amount of compensation for the other party according to the degree of fault. It should be noted that the party in breach of contract's own fault and the obligation of mitigation are two different rules: the former targets the occurrence of losses, and the latter targets the expansion of losses; the former reduces the amount of compensation, and the latter excludes the expanded part from compensation. In practice, the allocation of responsibilities depends on the degree of fault, the size of causation, and the scope of losses of both parties. The party claiming reduction needs to provide evidence to defend its fault. Therefore, when handling breach of contract disputes, both parties should truthfully reconstruct the process of performance and the circumstances of fault, and reasonably determine the proportion of responsibilities.

1. Problem background and typical scenarios

In breach of contract disputes, both parties often bear responsibility, and the breaching party's own faults may affect the compensation. There are three typical scenarios: first, the breaching party fails to cooperate as agreed, resulting in obstacles to the other party's performance; second, the breaching party continues to invest despite knowing the risks, thereby exacerbating the losses; third, both parties commit breaches of contract and need to apportion responsibility. When the Beijing Municipal Court adjudicates contract disputes, it will review whether the breaching party is at fault for the occurrence of the losses and accordingly reduce the amount of compensation accordingly. Understanding the distinction between the rules of contributory negligence and mitigation of damages can help parties accurately assess the allocation of responsibilities and compensation expectations.

II. Key points of contention

First, how does the breaching party's fault affect the amount of compensation? Second, the difference between fault and the obligation of mitigation. Third, how to divide the responsibilities when both parties breach the contract. Fourth, how to determine the degree of fault and causality. Fifth, how to allocate the burden of proof. The core is to review the breaching party's fault within the framework of the rules of contributory negligence and mitigation, distinguishing whether the fault relates to the occurrence or expansion of the loss, and reasonably determining the proportion of reduction.

III. Professional analysis by Henglue Lawyers

From a practical perspective, the impact of the breaching party's own fault on compensation requires distinguishing between two rules. First, contributory negligence, that is, if the breach of contract causes losses to the other party, and if the other party also bears fault for the occurrence of the losses, the corresponding amount of compensation for the losses may be reduced; Second, the obligation of mitigation of damages, that is, after the breach of contract occurs, if the breaching party fails to take appropriate measures and causes the losses to be expanded, it shall not request compensation for the expanded losses. The former targets the occurrence of losses, and the latter targets the expansion of losses. The two can coexist, but the applicable objects and consequences are different. In practice, the court will determine the proportion of compensation reduction based on the performance process, the actions of both parties, the degree of causation, and the scope of losses, rather than simply reducing it by half or exempting it entirely; for example, if the breaching party fails to provide necessary information as agreed, resulting in the other party's inability to deliver on time, its own fault may become a reason for reducing compensation. In terms of evidence, the party claiming compensation reduction shall provide evidence of the breaching party's faulty behavior, the relationship between the fault and the losses, and the extent of the impact; the breaching party may also provide evidence to prove that it has fulfilled its obligation of reasonable care, or that the losses are mainly caused by the other party, so as to safeguard its own claim for compensation. Therefore, in handling disputes over breach of contract, both parties should truthfully reconstruct the facts, organize evidence around fault and causality, and rationally assess the proportion of liability.

IV. Practical suggestions and legal basis

Action suggestions: First, sort out the process of performance and clarify the actions and faults of both parties; Second, distinguish between the occurrence and expansion of losses, and assert claims respectively; Third, the party claiming reduced compensation should provide evidence of the other party's fault; Fourth, the party in breach of contract should provide evidence that it has fulfilled its obligation of reasonable care; Fifth, if no agreement can be reached, the court may determine the proportion of liability through litigation. For corporate commercial and contract disputes, you can refer to the relevant provisions of the Civil Code of the People's Republic of China.Business and contract disputes in enterprisesFor issues related to evidence and procedures, you can refer to the following materials for reference:Integrated legal servicesLegal basis: Articles 592 and 591 of the Civil Code of the People's Republic of China (effective from 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 party in breach of contract may reduce the compensation if it is at fault for the occurrence of the loss. Secondly, the obligations of fault and mitigation of damages apply to different stages. Thirdly, the reduction ratio shall be determined by the court based on the fault and causality. Fourthly, the burden of proof lies with the party claiming the reduction. In cases involving contract disputes, the parties may seek resolution through legal channels.Business and contract disputes in enterprisesThe acquisition of services involves the integration of evidence and procedures.Comprehensive legal servicesFor matters involving the enforcement of compensation, you may refer to the following for reference.Creditor's rights and debts, and enforcement casesColumn.

VI. Frequently Asked Questions

Q1: Can the party that fulfills the contract get a reduced compensation if the other party is also at fault?

Yes. If the breach of contract results in losses for the other party, and the other party is at fault for the occurrence of the losses, the corresponding amount of compensation for the losses may be reduced. The specific proportion shall be determined by the court based on the fault and the causal relationship.

Q2: Is this the same as the obligation to mitigate damages?

They are different. The obligation to mitigate losses applies to the expansion of losses, while the obligation to reduce damages applies to the occurrence of losses. The former reduces the amount of compensation, while the latter excludes the expanded portion from compensation. The two obligations can coexist simultaneously.

Q3: What should we do if both parties breach the contract?

Each party should bear their respective responsibilities. The court will divide the responsibilities and compensation based on the breach of contract, the degree of fault, and the scope of losses of both parties.

Q4: Who proves that the party who fulfills the contract has committed a fault?

The party claiming a reduction in compensation shall provide evidence of the breach of contract by the other party, the connection with the loss, and the extent of the impact. If the evidence is insufficient, it will be difficult to obtain a reduction in compensation.

Q5: How should the party fulfilling the contract deal with it?

It can be proven that the party concerned has fulfilled its obligation of reasonable care and assistance, or that the loss is mainly caused by the other party. This can help the party concerned safeguard its claim for compensation and avoid having the compensation amount being excessively reduced.

This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify regional differences.

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

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available 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. In the event of a dispute, please consult a practicing lawyer in a timely manner.