[Direct answer]In the Beijing area, there are three key points in the exercise of the right of defense at the same time. First, the precondition for application: the parties should have mutual debts in the same contract, and the obligation to pay should be performed simultaneously; if the contract stipulates a sequence of performance, the right of defense at the same time will not apply, and the right of defense first will apply. Second, the conditions for exercise: it is necessary that the other party fails to perform according to the contract, and the party itself also has the ability to perform; if the party itself also fails to perform, it may constitute a breach of contract by both parties. Third, the method of exercise: according to Article 526 of the Civil Code of the People's Republic of China (effective from January 1, 2021), if the parties are mutually obligated in the order of performance, one party has the right to refuse the other party's request for performance before the other party performs, so it can be exercised by written notice before litigation, or it can be directly raised as a defense in the litigation; at the same time, the right of defense belongs to the right of defense, and in principle, it is necessary to notify the other party, and the contract will not be terminated. In practice, the most important thing is to fix evidence to prove that the other party has not performed according to the contract and the party itself has the conditions to perform. Articles 525 to 527 of the Civil Code stipulate three kinds of rights of defense, which can be referred to.Business and contract disputes in enterprisesThe service description in the column.

1. Problem background and typical scenarios

Most of those who consult this issue are contracting parties who have delivered goods or provided services before receiving payment. There are three common scenarios: the contract stipulates that payment is due upon delivery, but the other party neither pays nor picks up the goods; the parties agree to deliver simultaneously, but the other party delays; the other party refuses to pay on the grounds of quality disputes, while the other party believes there are no quality issues. The most common mistake in practice is to directly stop performance without any explanation: although the exercise of the right of defense generally requires notifying the other party, unilaterally stopping work or production without giving a reason may still be regarded as a breach of contract by the other party. A more prudent approach is to first issue a written reminder and explicitly state the right of defense, while preserving evidence that the other party has the conditions to perform, so as to limit the focus of the dispute to the other party's failure to perform.

II. Key points of contention

Focus One: Whether the debts of both parties constitute a mutual performance relationship with simultaneous fulfillment. Focus Two: Whether the contract stipulates the order of performance. Focus Three: Whether the party has the ability to perform. Focus Four: The specific form and evidence of the other party's failure to perform. Focus Five: Whether the obligation to notify of the defense has been fulfilled. Focus Six: Whether the exercise of the right of defense is affected by exceeding a reasonable time limit. Focus Seven: The choice of application between the three rights of defense. Focus Eight: The boundary between the right of defense and the right of rescission. The rules for exercising the right of defense can be referred toReal estate transactions and construction projectsThe instructions in the column.

III. Professional analysis by Henglue Lawyers

From the experience of handling disputes over contract performance, the key to winning or losing the right of simultaneous performance defense lies in the proof of three facts: first, whether the contract stipulates simultaneous performance. If a sequence is stipulated, the defense ground is not established; second, whether the other party has indeed failed to perform according to the contract and the party itself has already met the conditions for performance, including raw material procurement, production scheduling, and personnel arrangements; third, whether the party has properly notified the other party and explained the defense grounds. In practice, the most common reasons for failure are the first and third items: many parties fail to read the payment and delivery clauses in the contract carefully, resulting in claiming the right of simultaneous performance defense when the right of prior performance defense should be applied; or they only verbally stop work without written notification, which makes it difficult to explain the legitimacy of the defense once the case enters litigation. Therefore, when lawyers handle such cases, they usually first interpret the contract clauses article by article to confirm which defense right applies, and then organize the corresponding evidence materials.

IV. Practical suggestions and legal basis

Action suggestions: 1. Check the contract's provisions on the order of delivery and payment item by item; 2. Collect evidence proving that the other party has failed to perform according to the contract, such as payment reminders and the other party's responses; 3. Prepare materials proving that the party has the ability to perform the contract; 4. Send a written notice to the other party, explicitly invoking the right of defense and demanding their performance; 5. Retain proof of delivery of the notice; 6. Assess whether it is necessary to continue performance to avoid being deemed in breach of contract by the other party; 7. Evaluate whether the other party has committed a fundamental breach of contract and consider terminating the contract. Legal basis: Articles 225, 226, 227, and 263 of the Civil Code of the People's Republic of China (effective January 1, 2021); specific provisions shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglue Law Firm's Reminder

First, confirm the type of defense right applicable to the case. The order of provisions in the contract determines everything. Second, the party must have the ability to perform the contract, otherwise it may be deemed to have breached the contract. Third, when exercising the right of defense, the party must notify the other party and explain the reasons and basis for doing so. Fourth, the right of defense is not the same as the right of rescission. If the party unilaterally suspends work and fails to assert its rights for a long time, it may be deemed to have breached the contract. Fifth, the organization of evidence should focus on two main points: the other party's failure to perform its obligations and the party's ability to perform its obligations. Sixth, pay attention to reasonable time limits. If the time limit is exceeded, the other party may receive a notice to perform and demand continued performance. Seventh, if the other party has committed a fundamental breach of contract, the party may evaluate the path to rescission and refer to the relevant judgment process for reference.Property transactions and construction projectsColumn.

VI. Frequently Asked Questions

Q1: How to exercise the right of simultaneous performance defense?

It can be exercised in two ways: Firstly, send a written notice to the other party before litigation, clearly stating that the other party has failed to perform according to the contract, that the party refuses to perform accordingly, and urging the other party to perform; Secondly, directly raise the defense grounds to the court or arbitration institution. The key point is that there must be evidence to prove that the other party has failed to perform according to the contract and that the party has the ability to perform, and the delivery certificate of the notice should be preserved. Otherwise, the party may be at a disadvantage in the procedure.

Q2: If the other party doesn't pay first, can I refuse to deliver the goods?

It depends on the contractual provisions. If the contract stipulates that payment shall be made upon delivery of the goods or after delivery, the right of defense of simultaneous performance shall apply in this case. At this time, the party should perform its obligations first. Non-payment cannot be a reason for non-delivery. If the contract stipulates that both parties shall perform their obligations simultaneously, the party may assert the right of defense of simultaneous performance. Therefore, the key point is not who initiates the request first, but the order of performance stipulated in the contract, which is the most easily overlooked aspect in practice.

Q3: How to distinguish the three defenses?

At the same time, the right of defense applies to situations where both parties have mutual debts and should perform them simultaneously; the right of prior performance applies to situations where there is a sequence of performance, and the party who performs later refuses to perform; the right of uneasy defense applies to situations where the party should perform first, but there is conclusive evidence to prove that the other party may lose the ability to perform, and the party needs to notify the other party in time and provide guarantees. The applicable preconditions and procedural requirements are different. Choosing the wrong one will lead to the defense not being supported. For a detailed explanation of the relevant differences, please refer to the relevant materials.Business and contract disputes in enterprisesColumn.

Q4: Do I need the other party's consent to exercise the right of defense?

No, it's not necessary. The right of defense is a statutory right, which does not require the other party's consent, but in principle, the other party should be notified. The purpose of the notification is to let the other party know about the defendant's defense claims and give them the opportunity to perform, and it is also an important proof of the defendant's good faith. If the right of defense is not exercised for a long time without explanation, the other party may receive a reminder and claim that the defendant is in breach of contract. Therefore, it is necessary to notify the other party in time.

Q5: If the other party sues me after I raise a defense, can I file a counterclaim directly?

It can be claimed together in the lawsuit. The right of defense itself is a defense ground, which is different from a counterclaim. If the party claims compensation for losses or requests to terminate the contract due to the other party's breach of contract, it needs to be raised through a counterclaim or a separate lawsuit. Therefore, the strategy in practice is: first, use the right of defense to block the other party's performance request, and at the same time, claim breach of contract liability and compensation for losses through a counterclaim or a separate case, advancing along both paths simultaneously.

The above answer is based on the judicial practice in Beijing. The judicial interpretations in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situation.

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 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. In case of disputes, please consult a practicing lawyer in time.