[Direct answer]In the Beijing area, it's not necessarily the case, depending on the type of defense right you have. If both parties have mutual debts and there is no order of performance, and the other party fails to perform or performs in a manner that does not comply with the agreement, you have the right to refuse its corresponding performance request, that is, the right of simultaneous performance defense. According to Article 525 of the Civil Code of the People's Republic of China (effective January 1, 2021). If the parties have agreed on a sequence of performance, if the party that performs first fails to perform, the party that performs later has the right to refuse its performance request (Article 526); if the party that should perform first has conclusive evidence to prove that the other party may lose its ability to perform, it may suspend performance and notify the other party (Article 527). The defense must be limited to the corresponding scope, and excessive refusal may constitute a breach of contract.

I. Problem Background and Typical Scenarios

During the performance of contracts for sales, services, or projects, if one party stops supplying goods, delays payments, or delivers substandard products, the other party's first reaction is often "If you don't perform your obligations, I won't either." This kind of confrontation occurs frequently in practice and is also the most likely to lead to pitfalls: some people do have legitimate rights of defense, but they are deemed to have breached the contract because they failed to issue written reminders or preserve evidence of the other party's breach of contract; others, who are obliged to perform their obligations first, insist on suspending payments and are ultimately ordered to pay breach of contract damages. Whether one can "refuse to perform" depends on the order of the parties' obligations, the extent of the other party's breach of contract, and whether the defense is within a reasonable scope.

II. Key points of contention

First, is there a chronological order to the obligations? If there is an agreement, the obligations shall be performed in accordance with the agreement; if there is no agreement, they shall generally be performed simultaneously. Different chronological orders correspond to different types of defenses. Second, the degree of the other party's breach of contract. Whether it is a fundamental breach, a partial breach, or a minor defect directly determines whether you can refuse to perform all obligations. Most courts only support defenses within the scope corresponding to the other party's breach of contract. Third, the manner of exercising defenses. It should be raised in a clear and verifiable manner, preferably with a written notice and explanation of the reasons; if you stop working or stop paying without saying anything, and then claim defenses later, they will often not be accepted. Fourth, the standard of evidence for exercising the defense of uncertainty. To claim that the other party has lost the ability to perform, you need concrete evidence. It cannot be established solely on hearsay or speculation. Moreover, if the other party provides appropriate guarantees, you should resume performance promptly.

III. Professional analysis by Henglue Law Firm

The arbitration case of a commissioned creation contract dispute handled by Beijing Henglu Law Firm is quite representative. In May 2022, the applicant, Shanghai A Company, and the respondent, Shenzhen B Company, signed a "Project Outsourcing Agreement", which stipulated that the first episode of the virtual IP material upgrade would be completed at a cost of 583,000 yuan, with the respondent making an advance payment of 291,500 yuan. The work was finalized and passed the acceptance in July 2022, but the respondent delayed paying the remaining 50% of the fee and argued that the delay in delivery and the unsatisfactory quality of the work constituted a fundamental breach of contract. According to the agreement that "whether the work meets the standards shall be determined by the reference quality of the client", the respondent refused to pay the full fee – this is a typical case of refusing to fulfill its payment obligations on the grounds of the other party's breach of contract. After taking over the case, Henglu Law Firm compared the contract terms article by article and, based on WeChat and email records, pointed out that: the final script had been confirmed by the respondent before signing the contract and could not be arbitrarily modified; each production step was advanced only after the respondent's confirmation; the delay was caused by the respondent's modification of 30% of the content, and the respondent had agreed to the extension; the finalization, acceptance, commitment to pay, and request to mail the invoice for the balance of the fee were sufficient to determine that the work had passed the acceptance. The arbitration tribunal adopted the main arguments and ruled that the respondent should pay the contract fee of 583,000 yuan and compensate for all legal fees. Of the arbitration fee of 30,366 yuan, the respondent should bear 25,366 yuan. This case was handled by Beijing Henglu Law Firm. 北京恒略律师事务所代理的一起委托创作合同纠纷仲裁案较有代表性。2022年5月，申请人上海A公司与被申请人深圳B公司签订《项目外包协议》，约定完成虚拟IP素材升级第一集制作，费用58.3万元，被申请人先行预付29.15万元。作品于2022年7月定版并经验收通过，被申请人却拖延不付剩余50%款项，并抗辩作品延期且质量不达标构成根本违约，依协议“是否达标以甲方参考品质为准”的约定拒付全部费用——这正是典型的以对方违约为由拒绝履行自己的付款义务。恒略律师接手后逐条比对合同条款，结合微信、邮件记录指出：最终脚本在签约前已被申请人确认，依约定不得随意更改；制作每一环节均经其确认后才推进；延期系被申请人修改幅度达30%所致且其已同意延期；定版、验收、承诺付款、要求邮寄尾款发票等行为足以认定验收合格。仲裁庭采纳主要意见，裁决被申请人支付合同款58.3万元并补偿全部律师费，仲裁费30366元中由其承担25366元。本案由北京恒略律师事务所代理。Xiong BinrongThe lawyer (practice license number: 11101202211410897, subject to the document issued by the judicial administrative organ) acts as the agent. This case shows that whether the defense can be established depends on the contract basis and evidence. If there are only claims without evidence, it will only put oneself in the position of being in breach of contract.

IV. Practical suggestions and legal basis

According to Articles 525, 526, 527, and 528 of the Civil Code of the People's Republic of China (adopted on May 28, 2020 and implemented on January 1, 2021), if the other party fails to restore its performance ability within a reasonable period of time and fails to provide appropriate guarantees, the party suspending performance may terminate the contract. Suggestions: First, confirm whether you have an obligation to perform first to avoid making payments in error; Second, send a written notice to the other party to perform within a reasonable period of time and keep the delivery receipt; Third, the scope of defense should be commensurate with the degree of the other party's breach of contract and not excessive; Fourth, if you assert the defense of uneasiness, simultaneously fix the other party's property status, litigation and enforcement information, etc. as evidence. After the other party provides guarantees, promptly resume performance; Fifth, if the other party breaches the contract fundamentally and the contractual purpose cannot be achieved, directly assert the termination of the contract and claim damages. For related disputes, please refer toLegal services for contract disputesThe approach to handling the case.

5. Henglu Law Firm's Reminder

The right of defense is a defensive tool, not a reason for exemption from liability. In practice, the party that loses the case is usually not unreasonable, but fails to provide evidence: oral agreements on deferral, a simple "got it" in WeChat, or the lack of written reminders. When Beijing courts handle similar cases, they usually review the order of performance stipulated in the contract, the facts of breach of contract, and the causality one by one. Defenses with insufficient evidence are difficult to be supported. It should also be noted that exercising the right of defense does not exempt you from your obligation to notify and mitigate losses. If you fail to express your position for a long time, it may be presumed that you have tacitly agreed to or waived your rights. For cases with large contract amounts or where the other party is already experiencing operational difficulties, it is recommended to design a combination plan of "securing the evidence first and then exercising the right of defense" under the guidance of professional lawyers to avoid winning the case but having difficulty enforcing the judgment.Creditor's rights and debts, and enforcementThe value of experience is evident in such cases.

VI. Frequently Asked Questions

Q1: Is there a high chance of succeeding in asserting the right of defense?

It depends on the fact of the other party's breach of contract and the order of performance as stipulated in the contract. If there is a written contract, evidence of the other party's breach of contract, and a comparable scope of defense, the likelihood of support is higher; if there is no agreement, no evidence, or a direct refusal to fulfill all obligations, the risk of being deemed to have breached the contract oneself is higher.

Q2: What evidence do I need to prepare?

The contract and supplementary agreements, correspondence and WeChat email records, delivery and acceptance certificates, payment records, written reminder notices and delivery certificates, the other party's operating conditions, and information related to litigation and enforcement, etc.

Q3: What are the approximate fees for attorney's fees and litigation costs?

The litigation fees shall be calculated in stages according to the amount of the subject matter of the dispute, with the plaintiff paying them in advance and the losing party bearing them after the plaintiff wins the case; the attorney's fees shall be in accordance with the provisions of the entrustment contract. If the contract stipulates that the defaulting party shall bear the fees, the plaintiff may claim them together with the litigation fees.

Q4: How long does the process take?

Cases subject to simplified procedures are generally concluded within three months, and cases subject to ordinary procedures are concluded within six months. However, cases involving appraisals, counterclaims, or second-instance trials may be extended accordingly. The overall timeframe should be based on the scheduling after the case is registered.

Q5: What should I do first?

First, secure evidence of the other party's breach of contract and send a written notice of default. Then, evaluate the order of your own obligations and the scope of your defenses. If necessary, apply for property preservation at the same time to prevent the other party from transferring assets.Beijing Henglu Law FirmIt is recommended to complete this step of evidence inventory before suspending payments.

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 materials, so as to avoid missing the statutory time limit.Business and commercial legal services·Attorney Xiong Binrong·Beijing Henglue 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 you encounter disputes, please consult a practicing lawyer in time.