[Direct answer]In the Beijing area, if there is a breach of contract in a certain batch of deliveries, it does not necessarily mean that the entire contract can be terminated. It should be dealt with separately according to the impact of the breach on the purpose of the contract. According to Article 633 of the Civil Code of the People's Republic of China, if one batch of the subject matter is not delivered or does not conform to the contract, resulting in the failure to achieve the purpose of that batch, the contract may be terminated for that batch; if that batch and future batches cannot achieve the purpose of the contract, the contract may be terminated for that batch and future batches; if the delivered and undelivered batches are interdependent, the entire contract may be terminated. The key is to prove the connection between the breached batch and the overall purpose. It is recommended to fix the evidence of each batch's delivery and acceptance, and consult a lawyer to evaluate the scope of termination when necessary. For more details, please refer to the following link:Legal services for corporate commercial and contract disputes.

1. Problem background and typical scenarios

Delivery in batches is often seen in long-term transactions such as equipment procurement, raw material supply, customized processing, and system integration. Typical scenarios include: the supplier's batch of goods being of unsatisfactory quality, late delivery, or shortage in quantity; the buyer claiming to terminate the entire contract and demanding a refund and return of the goods; the seller arguing that only one batch of defective goods should be dealt with separately. Disputes often arise because the contract does not specify whether each batch is independent. If the entire contract is terminated blindly, the party in breach may be held liable for damages; if only a single batch is claimed and the interrelatedness is ignored, the party may lose the right to seek overall remedies. Such performance disputes can be resolved by combiningCreditor-debtor relations and enforcement case servicesRecover the payment for the goods.

II. Key points of contention

There are three main points of contention. Firstly, whether each batch is independent of the others: whether the contract stipulates separate and independent settlement in installments, and whether the risks and purposes can be separated. Secondly, the scope of the breach of contract: whether the non-conformity of a single batch results in the failure of the purpose of that batch, and whether it will affect future batches and those already delivered. Thirdly, the scope and consequences of termination: whether it is just to return or replace a single batch, terminate that batch and future batches, or retroactively apply to the entire contract, involving the return of the already performed part and the sharing of losses. For cases involving customized production line support, reference can be made to the relevant provisions.Real estate sales and construction project servicesThe referee's thinking on accepting the inspection in stages.

III. Professional analysis by Hengluo Lawyers

Take a dispute over a commissioned creation contract handled by our firm as an example. The applicant and the respondent signed a "Project Outsourcing Agreement", which stipulated that the respondent would produce virtual IP materials for upgrading, with a total fee of 583,000 yuan. After the respondent paid a down payment of 291,500 yuan, the project proceeded. In terms of timeline, the contract was signed in May 2022 and the work was finalized and accepted in July. Subsequently, the respondent delayed paying the remaining 50% of the fee. In terms of amount, the contract fee was 583,000 yuan, and the overdue breach of contract penalty was 116,600 yuan. In terms of claims, the applicant argued that the work had been created and accepted according to the requirements, and the respondent should pay the full amount; the respondent argued that the delay in delivery and the failure to meet quality standards constituted a fundamental breach of contract, and therefore had the right to refuse to pay. After Hengluo Law Firm intervened, it analyzed the contract terms and WeChat confirmation records item by item, proving that every step had been confirmed by the respondent, that the delay was caused by the respondent's repeated modifications, and that the product had been accepted and finalized. Therefore, the respondent should pay the full amount according to the contract. The arbitration tribunal adopted the main opinion and ruled that the respondent should pay the contract fee of 583,000 yuan and compensate for all legal fees. This case was handled by Beijing Hengluo 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

The core basis is Article 633 of the Civil Code of the People's Republic of China (effective January 1, 2021), which stipulates three circumstances under which partial delivery may lead to contract termination; Article 634, which states that the seller may terminate the contract if the buyer fails to pay the due price within one-fifth of the total amount; Article 563, which governs termination due to fundamental breach of contract; and Article 566, which outlines the consequences of termination. Practical advice: When concluding a contract, clarify whether each batch is independent, and specify the acceptance standards and payment milestones; during performance, retain records of acceptance confirmation and communication for each batch; when a breach occurs in a single batch, first assess its impact on the overall purpose and then determine the scope of termination; and notify the termination in writing and explain the legal basis. For complex supply chains, relevant provisions may be combined with other legal frameworks for comprehensive analysis and implementation.Intellectual property protection and corporate legal servicesImprove the transaction documents.

5. Henglu Law Firm's Reminder

When resolving disputes over batch deliveries, it is most undesirable to adopt a "one-size-fits-all" approach to terminate the contract. First, determine the relationship between the breached batch and the overall purpose of the contract. Never terminate the entire contract without first verifying the facts. Second, document the delivery, acceptance, and evidence of non-compliance for each batch, especially retaining the other party's confirmation records. Third, distinguish among three possible approaches: "terminating a single batch," "terminating that batch and future batches," and "terminating the entire contract," and choose the most appropriate one. Fourth, notify the other party of the termination in writing and claim the return of the performed portion and compensation for losses. Excessive termination may result in you switching from being a compliant party to a defaulting party. If professional support is needed, you can seek assistance from a legal professional.Special services and other case-related servicesDevelop a strategy.

VI. Frequently Asked Questions

Q1: If there are only one batch of deliveries that are in breach of contract, will I win if I terminate the entire contract?

Whether the entire contract can be rescinded depends on whether the breach of contract affects the overall purpose of the contract, rather than the result commitment. According to Article 633 of the Civil Code, the entire contract can only be rescinded when the delivered and undelivered batches are interdependent and a breach of contract in a single batch affects the overall purpose. If the batches are independent and a single batch does not affect the rest, the contract can usually only be rescinded for that batch or that batch and future batches. The court will review the contractual provisions and their connection to performance. It is recommended to first demonstrate the interdependence of the batches and their impact on the purpose, and then argue about the scope of rescission. Do not substitute emotional demands for "full withdrawal" for legal arguments, to avoid being deemed in breach of contract yourself.

Q2: If there's a breach of contract regarding delivery in installments, what evidence do I need to prepare?

The core evidence includes: the entire contract and the terms of batch delivery, acceptance, and payment (proving the independence or interdependence of each batch), the delivery notes and acceptance records for each batch, the inspection reports or communication confirmations for non-conforming batches, the correspondence and WeChat records (proving the scope of the breach of contract and the other party's attitude), and the basis for calculating the losses. The organization of the evidence revolves around "which batch was in breach of contract—whether it affected the purpose of that batch—and whether it involved future and already delivered batches". The more complete the materials are, the more favorable it will be for determining the scope of the exemption; it is recommended to establish batch-by-batch files to avoid confusion and misidentification.

Q3: If you propose to terminate the breach of contract in batches, what are the approximate costs of attorney fees and litigation fees?

The litigation fees shall be calculated in accordance with the "Measures for the Payment of Litigation Costs" based on the amount of the litigation request (such as refund of the purchase price, liquidated damages), and shall be borne by the losing party. For the confirmation of the termination of the contract and the claim for damages, the amount claimed shall be the basis of calculation. The attorney's fees shall be charged on a per-case basis or according to a percentage of the amount claimed, subject to the specific provisions of the entrustment contract. There is no standard pricing, and the risk-sharing agreement is subject to a percentage cap. It is recommended to calculate the amount that can be claimed and the cost of litigation before entrusting a lawyer, and to prioritize negotiating an exchange or correction for minor defects in a single batch. Only after the overall dispute has been resolved should litigation be initiated.

Q4: How long does it usually take to resolve disputes through phased deliveries?

If both parties have no disputes over the termination, the notice will take effect upon its arrival and no litigation is required. If the case proceeds to litigation, the first-instance ordinary procedure will be concluded within six months and the summary procedure within three months; for cases with complex subject matters or requiring appraisal, the timeframe will be longer. For appeals in the second instance, the general timeframe is three months. After the judgment takes effect, if it involves returning goods and refunding money, an enforcement procedure is also required. Overall, if there are no disputes, the case can be resolved within a few days; if there are disputes, it often takes several months to a year from filing the lawsuit to recovering the money through enforcement. It is recommended to fix the evidence of service during the reminder and termination stages, and if necessary, apply for property preservation to accelerate the recovery of the money.

Q5: If there is a breach of contract for a batch of goods delivered in installments, what should I do specifically?

It is recommended to follow four steps: First, immediately fix the batch of default evidence (delivery notes, acceptance records, inspection reports, and communication confirmations); Second, review the contract's provisions on batch independence and acceptance to determine whether the termination applies to this batch, this batch and future batches, or the entire contract; Third, send written objections and termination notices to the other party, clarifying the basis and scope, and claiming the return of the performed part and compensation for losses; Fourth, if the other party refuses to compensate or counter-sues, initiate litigation within the statute of limitations, and let the court determine the effectiveness and scope of the termination. Throughout the process, retain all correspondence and delivery certificates, and, if necessary, engage a lawyer to assess the situation.

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 the relevant evidence, so as to avoid missing the statutory time limit.Business and commercial legal services·Attorney Xiong Binrong·Beijing Hengluo Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public 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 a dispute arises, please consult a practicing lawyer in time.