[Direct answer]In the Beijing area, if the other party breaches the contract and fails to perform its obligations, you can, in accordance with the contract or the law, claim for the other party to continue to perform the contract, take remedial measures, rescind the contract, and claim compensation. According to Article 577 of the Civil Code of the People's Republic of China (effective January 1, 2021), if a party fails to perform its contractual obligations or performs them in a manner inconsistent with the contract, it shall bear such contractual liabilities as continuing to perform the contract, taking remedial measures, or compensating for losses; if a monetary debt is delayed, it may request payment in accordance with Article 579, and the agreed penalty shall be handled in accordance with Article 855. It is recommended to first fix the contract and the evidence of performance, send a written reminder, and then choose the path of arbitration or litigation. You can refer to it for reference.Business and contract disputes in enterprisesColumn.

I. Problem background and typical scenarios

Typical scenarios of breach of contract and non-performance include: the other party delaying acceptance or refusing to pay the contract amount after the completion of a project or outsourcing project; long-term arrears in payment after the delivery of goods; the lessee defaulting on the rent or the lessor refusing to hand over the property in a lease contract; and the suspension of a service contract midway, with the other party neither performing its obligations nor terminating the contract. Enterprises often delay handling such disputes due to high collection costs and considerations of maintaining relationships, only to miss the best opportunity for recourse. When dealing with such disputes in the Beijing area, enterprises usually first evaluate the validity of the contract and the completeness of the evidence, then weigh the cost-benefit of litigation, arbitration, and commercial negotiations, and adhere to the three-year statute of limitations and key performance deadlines.

II. Key points of contention

Focus One: The determination of the facts of breach of contract requires verification by comparing the contractual provisions with the traces of performance. Focus Two: When choosing remedies, it may be difficult to combine continued performance, termination of the contract, and damages at the same time. It is necessary to pay attention to the statutory conditions for termination set forth in Article 563 of the Civil Code. Focus Three: The adjustment scope of the liquidated damages is limited. If the amount is too high or too low, the parties may request the court or arbitration tribunal to adjust it. Focus Four: The burden of litigation costs such as attorney's fees and preservation fees depends on the contractual provisions and adjudication rules. Focus Five: For dispute resolution, if the parties have agreed to arbitration, the arbitral award is final and the process is relatively short; if no such agreement exists, the litigation process shall be followed. Focus Six: When the other party has no property, there is an execution risk. It is advisable to apply for preservation measures at the same time as filing a lawsuit, and reference materials related to enforcement can be consulted for further guidance.Creditor's rights and debts, and enforcement casesColumn. Specifically, please refer to the currently effective laws, regulations, and judicial rulings for reference.

III. Professional analysis by Henglue Lawyers

Take the arbitration case of a commissioned creation contract dispute handled by our firm as an example. Shanghai Jia Technology Co., Ltd. and Shenzhen Yi Network Co., Ltd. signed the "Project Outsourcing Agreement" in May 2022, stipulating that Jia Technology would complete the upgrade of virtual image materials for a fee of 583,000 yuan. Jia Technology completed the production as agreed, and the final version was approved on July 16 and passed the acceptance test on July 20, 2022. However, Yi Network delayed payment of the remaining half of the fee, citing "poor quality and late delivery" as reasons for refusing to pay. Lawyer Xiong Binrong represented Jia Technology in applying for arbitration, arguing that the script was confirmed according to Yi Network's requirements, and each step was approved by Yi Network before proceeding. The delay was caused by Yi Network's repeated modifications, which were agreed to by Yi Network. Yi Network's employees actively approved the final version, inspected the work before demanding the invoice for the balance, and promised to pay the full amount. Confirmations via WeChat and email also met the written acceptance requirements, so the acceptance should be deemed successful. The arbitration tribunal adopted the lawyer's main arguments, ruling that Yi Network should pay the contract amount of 583,000 yuan and compensate Jia Technology for all legal fees. The arbitration fee of 30,366 yuan was also primarily borne by Yi Network. In another case involving a contract dispute, our firm's lawyers represented the lessor in pursuing the lessee who "disappeared" after customizing the renovation. The court determined that the contract was valid and that the defendant had breached the contract maliciously, awarding damages of 365,000 yuan for the renovation costs. These two cases highlight that acceptance records and written agreements are crucial for successful breach of contract claims. This case was handled by Beijing Henglu Law Firm.Xiong BinrongThe attorney (practice certificate number: 11101202211410897, subject to the certificate issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Action recommendations: 1. Immediately organize contracts, supplementary agreements, acceptance records, reminder records, and payment vouchers, and file them chronologically; 2. Send written reminder letters and retain proof of delivery to lay the procedural foundation for termination and claims; 3. Review dispute resolution clauses to determine whether to pursue arbitration or litigation, and assess the necessity of preservation measures and property clues; 4. When claiming breach of contract penalties or compensation for losses, provide evidence of actual damages. If the contract contains unclear provisions, calculate damages based on the rule of foreseeable benefits; 5. If the contract includes provisions on bearing attorney's fees, also claim compensation for legal defense costs. Legal basis: Articles 577 and 579 of the Civil Code of the People's Republic of China (effective January 1, 2021) govern breach of contract liability and the continued performance of monetary obligations. Article 563 lists statutory grounds for termination, and Article 585 stipulates breach of contract penalties and their adjustment rules. For reference on legal documents and preservation measures, please refer to the relevant provisions.Special services and other casesColumn.

5. Henglu Law Firm's Reminder

Risk Warning: First, the statute of limitations is generally three years. If you don't keep records of long-term verbal collection efforts, your rights may expire due to "sleeping". Second, the paths of first terminating the contract and then claiming compensation and first claiming compensation and then terminating the contract are different. The wrong order may affect the scope of relief. Third, if you stop work and terminate the contract without notice, you may be accused of breaching the contract by the other party. Fourth, winning the lawsuit is just the starting point. If the other party has no property, you still need to rely on preservation and enforcement procedures to realize your creditor's rights. It is recommended to have a professional lawyer evaluate the evidence and strategy before making a demand for payment and filing a lawsuit, and you can consult with them for advice.Beijing Henglue Law FirmThe contract dispute section on the official website.

VI. Frequently Asked Questions

Q1: If the other party breaches the contract and fails to perform it, what remedies can I claim?

According to Article 577 of the Civil Code, the party may claim for continued performance, remedial measures such as repair or re-performance, or compensation for losses; if the other party fails to perform within a reasonable period after being urged to perform or breaches the contract fundamentally, the contract may be rescinded in accordance with Article 563; if there is a penalty clause, the party may claim in accordance with Article 585, and if the penalty is too low or too high compared with the actual losses, the party may request adjustment; for monetary debts, the party may request payment in accordance with Article 579. Multiple remedies need to be selected based on the contract and the performance status.

Q2: What evidence do I need to prepare if I want to sue or arbitrate against the other party for breach of contract?

The following should be prepared: the contract text and supplementary agreements, change records; evidence of the party's performance, such as delivery records, acceptance documents, and work results; evidence of the other party's breach of contract, such as reminder letters, chat records, rejection records, and overdue payment records; evidence of losses, such as the price difference of purchasing alternative products and proof of production loss; dispute resolution clauses and service information. The evidence should be organized into a timeline, and for claims for attorney's fees, the contractual basis must also be provided.

Q3: How are the penalty and actual losses calculated? Can I claim attorney's fees?

The penalty for breach of contract shall be based on the provisions of the contract. If the penalty is excessively high compared to the actual losses caused, the court or arbitration tribunal may reduce it appropriately in accordance with Article 85 of the Civil Code; if it is too low, the party may request an increase. If there is no agreement on the penalty, the party shall compensate for the actual losses, including the benefits that could be obtained after the performance of the contract. Legal fees, preservation fees, and other costs of protecting rights and interests usually can be supported if the contract explicitly stipulates that the breaching party shall bear them. If there is no such stipulation, the determination shall be subject to the rules of adjudication. It is advisable to include such clauses in the contract when signing the agreement.

Q4: How long does it usually take to recover the contract payment?

The arbitration agreement usually provides for final and binding arbitration, with relatively quick procedures. The first-instance litigation under the ordinary procedure generally takes no more than six months, and the application of the summary procedure is even faster. The second-instance litigation, in which the other party appeals, usually takes about three months. If the other party's whereabouts are unknown or if an evaluation or audit is needed, the time period will be extended. If the other party fails to perform after winning the lawsuit, it is necessary to apply for compulsory enforcement. The overall pace is closely related to the completeness of evidence and the timeliness of preservation. For related commercial matters, you can refer to the relevant provisions.Business and contract disputes in enterprisesColumn.

Q5: If you find that the other party might not pay, what steps should you take to handle the situation?

The first step is to check the contract terms and our own performance to confirm the fact that the other party has breached the contract; the second step is to send a written reminder and keep the delivery certificate, while assessing whether preservation measures are necessary; the third step is to initiate arbitration or litigation according to the dispute resolution clauses, and simultaneously claim the contract amount, the breach of contract penalty, and the cost of protecting our rights; the fourth step is to consider whether to terminate the contract, cut losses, and seek other transactions; the fifth step is to apply for enforcement promptly after winning the lawsuit, and you can refer to the relevant provisions for details.Special services and other casesColumn.

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 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. →Business and commercial legal services·Attorney Xiong Binrong·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. If you encounter disputes, please consult a practicing lawyer in time.