[Direct answer]In the Beijing area, exercising the right of defense simultaneously means that in the same bilateral contract where both parties have mutual debts and there is no specific order of performance, one party has the right to refuse the other party's performance request before the other party performs, and has the right to refuse the corresponding performance request if the other party's performance does not comply with the contract. According to Article 225 of the Civil Code of the People's Republic of China (effective January 1, 2021), exercising this right requires meeting four conditions: both parties have mutual debts based on the same bilateral contract, the debts have all reached the performance period, the other party has not performed or performed in a manner that does not comply with the contract, and the party's counter-performance has the possibility of being performed. Correctly exercising this right can counter the other party's payment or delivery requests in litigation, but abusing it may be deemed as delaying performance of the contract. It is recommended to judge based on the contract provisions and performance traces, and to refer to the relevant provisions for reference.Business and contract disputes in enterprisesColumn.

I. Problem background and typical scenarios

At the same time, the application scenarios of exercising the right of defense are very common: in a sale contract where the buyer and seller exchange money and goods simultaneously, the seller may require the buyer to pay first, while the buyer may require the seller to deliver the goods first; in a service contract, the client may refuse to pay the balance on the grounds that the results have not been accepted, while the contractor may stop working on the grounds that the payment has not been made; in a lease contract, if the lessor fails to fulfill its maintenance obligations, the lessee may suspend the payment of rent; in equity transfer and equipment procurement, both parties have the obligation to transfer ownership and make payments. Such disputes account for a large proportion of contract disputes, and the core issue is to determine whether the debts of both parties constitute mutual performance and how the order of performance is stipulated. When the Beijing District Court adjudicates such cases, it usually starts with the contract terms, transaction practices, and actual performance traces, first determining the order of performance, and then reviewing whether the right of defense is established.

II. Key points of contention

The first focus is whether it belongs to the counter-performance in the same two-party contract. Debts without a consideration cannot invoke this defense. The second focus is the determination of the order of performance. If there is an agreement in the contract, the performance shall be in accordance with the agreement; if there is no agreement, it shall be determined according to the transaction habits and the provisions of the contract. The third focus is the scope of "non-conforming performance". The party can refuse the performance request corresponding to the defective part, but not all of it. The fourth focus is the way of exercising the defense. It is usually raised in litigation or arbitration, and there is no need to file a separate lawsuit. The fifth focus is the consequences of the defense being established. The other party's performance request and claim for delay penalties will generally not be supported. The sixth focus is the risk of the defense not being established. The party may be deemed to have delayed performance and bear the liability for breach of contract. The seventh focus is the distinction from the right of prior performance and the right of uncertainty defense. They shall be dealt with respectively according to Articles 526 and 527 of the Civil Code. For matters involving enforcement resistance, reference can be made to the relevant provisions.Creditor's rights and debts, and enforcement casesColumn. Specifically, it shall be subject to the currently effective laws, regulations, and judicial rulings.

III. Professional analysis by Henglue Law Firm

Judging from Henglue's practical experience, the key to exercising the right of simultaneous performance lies in the dual verification of the contract text and the traces of performance. Common scenarios include: the contract explicitly stipulates "payment upon delivery of the goods" or "payment after the acceptance of the goods", but one party sues for payment without fulfilling its prior obligations, and the other party invokes Article 225 of the Civil Code to defend against the claim and wins the case; when the contract does not stipulate the order of performance, the court determines that the parties should perform simultaneously according to the transaction practices, and the party that refuses to pay does not constitute a breach of contract. There are also common failures: one party refuses to pay most of the money on the grounds of minor defects in the other party, which exceeds the "corresponding" scope and is deemed to constitute a delay; or treating the defense as a tool for exemption from liability, taking a passive attitude for a long time without fixing the evidence of the other party's breach of contract, and finally failing to defend against the claim and being held liable instead. Other pitfalls include: treating the debts under different contracts as a single claim for payment, ignoring the requirement of the expiration of the payment period, and mistaking the right of defense for a counterclaim request. It is recommended to sort out the performance timeline before claiming the defense, and if necessary, entrust a professional lawyer to evaluate it. The key points of the service can be referred to.Special services and other casesColumn.

IV. Practical suggestions and legal basis

Action suggestions: 1. First, read the contract terms to confirm the nature of the debt, the order of performance, and the acceptance standards between the parties. If there is no agreed-upon order, you can claim simultaneous performance. 2. Collect evidence of the other party's failure to perform or defective performance, such as reminder letters, chat records, acceptance records, and on-site images. 3. When refusing to pay or accept goods, provide written reasons and cite contract provisions to avoid being interpreted as unreasonable delay. 4. Limit your claims to the portion corresponding to the other party's non-performance and do not extend them to the entire debt. 5. If the other party shows signs of transferring assets or losing the ability to perform, consider exercising the right of defense against uncertainty under Article 527 of the Civil Code to suspend performance and notify the other party promptly. Legal basis: Article 225 of the Civil Code of the People's Republic of China (effective January 1, 2021) stipulates the right of defense against simultaneous performance; Article 226 stipulates the right of defense against prior performance; Articles 227 and 228 stipulate the right of defense against uncertainty and subsequent paths to termination; Article 277 stipulates the liability for breach of contract.

5. Henglu Law Firm's Reminder

Risk Warning: Firstly, the right of defense is a defensive tool and cannot actively exempt the obligation to pay or deliver goods. A long-term stalemate may result in both parties being liable for breach of contract; Secondly, if the scope of the refusal to pay exceeds the part that the other party has not performed, the excess part still constitutes a delay and may result in the payment of a breach of contract penalty; Thirdly, the burden of proof lies with the party claiming the right of defense. If there is a lack of written evidence of the other party's non-performance, it should be used with caution; Fourthly, if the contract has stipulated the order of performance, the right of defense should be handled in accordance with Article 526 first. Citing the wrong article may affect the determination of the arbitration. It is recommended to consult a professional lawyer before taking measures such as refusing to pay or suspending work, and evaluate the possibility of establishing a defense. You can also consult for more information.Beijing Henglu Law FirmThe contract dispute section on the official website.

VI. Frequently Asked Questions

Q1: Under what circumstances can one exercise the right of defense of simultaneous performance?

The following conditions must be met simultaneously: Both parties owe debts to each other based on the same two-party contract, and the debts have a quid pro quo relationship; both parties' debts have reached the repayment period; the other party has not performed the debt or performed it in a manner inconsistent with the agreement; and the counter-performance of the party itself has the possibility of being performed. According to Article 525 of the Civil Code, the prerequisite are that the contract does not stipulate the order of performance. If the order is stipulated, the right of defense of performance in advance stipulated in Article 526 shall apply. If any of the four conditions is not met, the claim will not be established. Before making a claim, the claimant should check each condition one by one.

Q2: The other party only delivered part of the goods. Can I refuse to pay the full amount of the goods?

It cannot be rejected entirely. According to Article 525 of the Civil Code, if the other party's performance does not conform to the contract, it can only reject its "corresponding" performance request, that is, the scope of refusal to pay should correspond to the value of the undelivered or defective part. If the main body of the goods has been delivered and can be used, it is more prudent to temporarily withhold the payment only for the missing or defective part. If the entire payment is rejected, it may be deemed as a delay in payment and the party will bear the liability for breach of contract. It is recommended to withhold the payment proportionally and explain the reasons in writing.

Q3: How can I assert the defense of simultaneous performance in a lawsuit? Do I need to pay additional fees for this?

In cases where the other party sues for payment or delivery, it is sufficient to raise the defense of simultaneous performance directly in the defense and trial. This constitutes a defense rather than a counterclaim, and generally does not require additional fees. It is also possible to request the court to order the other party to perform simultaneously when suing oneself. When making a claim, one should submit the contract, the agreement on the order of performance, and evidence of the other party's failure to perform or defective performance. If the court finds the claim to be valid, it may order both parties to perform simultaneously. Relevant commercial matters can be referred to for reference.Business and contract disputes in enterprisesColumn.

Q4: What evidence do I need to prepare to assert the defense of simultaneous performance?

The following materials should be prepared: the contract text and supplementary agreements, which prove the mutual debts and the order of performance; evidence of the other party's failure to perform, such as reminder letters, chat records, and refusal to accept records; evidence of defects in performance, such as acceptance reports, inspection conclusions, and on-site photos; proof that the party has fulfilled the conditions for performance, such as inventory lists and fund preparation; and supporting materials for transaction practices. The key is to prove that the debts between the two parties have reached the repayment period but the other party has not made the corresponding payment. The evidence should be systematic and comprehensive.

Q5: What are the consequences of failing to raise a defense? How can we reduce the risks?

If the defense is not established, the party's refusal to pay or accept the goods may be deemed as a delay in performance, and the party shall continue to perform the contract and bear the liability for breach of contract or compensate the other party for the losses in accordance with Article 577 of the Civil Code. Methods to reduce risks: check the contract provisions and performance traces item by item before making a claim; limit the scope of refusal to pay to the part that the other party has not performed; explain the reasons in writing and keep the evidence of reminders; if uncertain, consult a lawyer to evaluate the possibility of success and refer to it for reference.Special services and other casesColumn.

The above questions and answers are mainly based on the judicial practice in Beijing. There may be differences in the adjudication guidelines in other regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

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. →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.