[Direct answer]In the Beijing area, the two are different in terms of applicable circumstances and legal consequences. The right of revocation targets defects in the expression of intent at the time of contract formation. According to Articles 147 to 151 of the Civil Code of the People's Republic of China (effective January 1, 2021), if a contract is concluded under circumstances such as major misunderstanding, fraud, coercion, or grossly unfair terms, the injured party has the right to request its revocation; after revocation, the contract is legally binding from the beginning. The right of rescission targets obstacles or breaches of contract during the performance of the contract. According to Article 563, etc., if the contract cannot be fulfilled due to force majeure, if one party explicitly states or demonstrates by actions that it will not perform its main obligations, or if the delay in performance is still not fulfilled after being urged, the parties may rescind the contract; after rescission, the contractual relationship will terminate in the future, and the performed part will be dealt with in accordance with Article 566. In addition, the exercise periods of the right of revocation and the right of rescission are different. The former usually has a shorter statute of limitations, while the latter should be exercised within a reasonable period of time.

1. Problem background and typical scenarios

When parties encounter contractual issues, they often are unsure whether to claim revocation or rescission. Typical scenarios include: being concealed of important facts by the other party at the time of signing the contract and subsequently demanding revocation; the other party failing to perform on schedule, resulting in the failure of the contract's purpose, and demanding rescission; the existence of both fraud and breach of contract, and how to choose the basis of the right of claim; claims for revocation being rejected after exceeding the time limit; and claiming that the contract was invalid from the outset after rescission, but the basis of the claim does not meet the requirements. When adjudicating such cases in Beijing, the court will review whether the basis of the right of claim is appropriate, whether there are statutory or contractual circumstances, and whether the right of claim was exercised within the time limit.

II. Key points of dispute

First, what are the applicable circumstances of revocation and rescission respectively? Second, how long is the exercise period of the right of revocation and the right of rescission? Third, does the exercise of these rights require litigation or arbitration? Fourth, what are the differences in the retroactive effect of legal consequences? Fifth, can these two rights be claimed or converted simultaneously? Sixth, how are third parties and bona fide counterparties protected?

III. Professional analysis by Henglue Law Firm

Based on Henglu Law Firm's practical experience in handling contract disputes, the two rights can be distinguished from three aspects. First, the scope of application is different: The right of revocation targets the defects in the expression of intention at the time of contract conclusion, focusing on whether the contract can be established and take effect; The right of termination targets the performance obstacles after the contract is validly established, focusing on whether the contractual relationship will continue. Second, the legal consequences are different: After revocation, the contract is invalid from the outset, and the parties shall return the property obtained from the contract; After termination, the contract will terminate in the future, and the unperformed part will be terminated, and the performed part will be restored to its original state or compensated for damages according to Article 566 of the Civil Code. Third, the time limit and procedures are different: The right of revocation usually applies to a relatively short statute of limitations, such as in the case of major misunderstandings or manifestly unfair situations, it should generally be exercised within one year from the date when the party knows or should know the grounds for revocation, and is subject to the maximum statute of limitations; The right of termination should be exercised within a reasonable period of time, and the contract will be terminated when the notice reaches the other party. In addition, if the basis of the claim asserted by the party does not conform to the facts, the request may not be supported, so it is crucial to choose the correct basis of claim.

IV. Practical suggestions and legal basis

Action list: First, sort out the disputed facts and determine whether they belong to the defects in the expression of intention at the time of conclusion or the breach of contract during the performance stage; Second, check the exercise period to avoid losing rights due to exceeding the exclusion period or reasonable period; Third, choose an appropriate exercise method. The right of revocation generally needs to be claimed through litigation or arbitration, and the right of rescission can be exercised by notifying in accordance with the agreement or by statutory means; Fourth, keep the notices, reminders, and delivery certificates; Fifth, if there are different claims about the consequences, clarify specific requests such as return, discount, and compensation. For contract disputes, you can refer to the relevant provisions.Business and contract disputes in enterprises; Those involving property restitution and enforcement can be combinedCreditor's rights and debts, and enforcementColumn. Legal basis: Articles 147 to 151, Article 152, and Articles 563, 565, and 566 of the Civil Code of the People's Republic of China (effective January 1, 2021). The specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Reminder

Firstly, revoke the contract due to defects at the time of conclusion and resolve the performance obstacles. Secondly, the revocation period is relatively short, so it's essential to exercise the right in a timely manner. Thirdly, choosing the wrong basis for the right of claim may lead to the risk of losing the case. Fourthly, the notice of rescission should be delivered in a traceable manner and the relevant evidence should be preserved. If you are currently facing similar problems, you can seek assistance through the following channels:Business and contract disputes in enterprisesWe provide a comprehensive solution for services, which includes the integration of payment execution.Creditor's rights and debts, and enforcement板块。

VI. Frequently Asked Questions

Q1: What is the fundamental difference between the right of revocation and the right of rescission?

The right of withdrawal and the right of rescission are different in their purpose and consequences. The right of withdrawal targets defects in the expression of intent at the time of contract formation, such as major misunderstandings, fraud, coercion, and manifestly unfair terms. After exercising this right, the contract is deemed invalid from the outset. The right of rescission targets obstacles and breaches of contract during the performance of the contract. After exercising this right, the contractual relationship will terminate in the future. The former focuses on whether the contract can be established and take effect, while the latter focuses on whether the contract should continue to be performed.

Q2: Under what circumstances can a contract be revoked?

According to Articles 147 to 151 of the Civil Code of the People's Republic of China, if a contract is concluded due to a major misunderstanding, if one party uses fraudulent means to make the other party conclude the contract against their true intention, if the contract is concluded by coercive means, or if the contract is concluded when one party takes advantage of the other party's state of distress or lack of judgment capacity, and the contract is obviously unfair when it is concluded, the injured party has the right to request its rescission.

Q3: How long does it take for the right of revocation to lapse if it's not exercised?

The right of revocation is subject to a statute of limitations. Generally, if a party fails to exercise the right of revocation within one year from the date when he/she knows or should have known the grounds for revocation, or within 90 days from the date of the major misunderstanding, the right will be extinguished; if the party is coerced, he/she must exercise the right within one year from the date when the coercive act ceases; and the right is subject to a maximum statute of limitations of five years. The specific provisions shall prevail. If the time limit is exceeded, the party will not be able to claim the right.

Q4: What should I do if I've been scammed and the other party refuses to fulfill their obligations?

It is necessary to choose an appropriate legal basis for the claim. If it is based on fraud at the time of contract signing, the party may claim rescission; if it is based on breach of contract during the performance stage, the party may claim termination and pursue breach of contract liability. The evidentiary focus and consequences of the two approaches are different, and it is not advisable to make conflicting claims. It is recommended that the lawyer determine the direction of the claim after evaluating the evidence and deadlines.

Q5: Can I still request a rescission after the contract has been terminated?

It's generally difficult to use them together. Rescission presupposes that the contract is validly established, while revocation denies the validity of the contract. There is a logical conflict between the two, and one of them should usually be chosen based on the facts. If there are indeed circumstances that can be rescinded and the exclusionary period has not passed, the claim for rescission can be changed after evaluation; otherwise, the request should focus on rescission and breach of contract liability to avoid being rejected due to an improper basis.

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

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

Disclaimer: This article is compiled based on the current effective laws and regulations and open 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.