Key Points in Judgment
Where there is no direct evidence to prove the establishment of the international cargo purchase and sales contracts (“the Contract”), evidence regarding theContract having been performed and the counterparty having accepted said performance, such as, delivery notes, cargo-received notes, settlement statements, invoices, account reconciliation letters, or confirmation letters of creditor’s rights, could be submitted to prove the Contract has been established, come into force, and performed.
Case Details
Qingcheng Company’s claim: Qingcheng Company had been traded with ILHAMI since 2008 by selling electronic products to ILHAMIwhich then sold the same to overseas buyers. Since October 25, 2008, ILHAMI had purchased from Qingcheng Company monitoring equipment and derivative products many times in Shenzhenbut paid USD82,855 only, with RMB1,097,530.45 outstanding. Qingcheng Company had urged ILHAMI to pay many times but was rejected every time. As a result, Qingcheng Company pleas to the Court to order that ILHAMI immediately pays Qingcheng Company the cargo payment of RMB1,097,530.45 and interest of RMB324,207.
Judgment Results
The court holds that Qingcheng Company is liable for proving its claims that there was an international cargo purchase and sale contract entered by and between Qingcheng Company and ILHAMI, and that it had already delivered goods to ILHAMI. Evidence such as commercial invoices, proforma invoices, bills of lading, airway bills, and payment records provided by Qingcheng Company could not be verified as no original copies thereof were provided, and ILHAMI denied above evidence. Therefore, the authenticity of above evidence could not be confirmed. Even though above evidence is authentic, it could not prove ILHAMI was the buyer, or ILHAMI had taken the goods and made payment accordingly. Qingcheng Company’s claim that it had delivered goods in dispute to ILHAMI is not supported with sufficient evidence, and thus Qingcheng Company shall be responsible for any adverse consequences due to failure on presenting evidence. Qingcheng Company’s claim that ILHAMI shall pay overdue payment and the interest thereof is not based on factual ground and thus shall be dismissed.
Significance of This Case
Disputesover the Contractare one of the main commercial disputes in this Free Trade Pilot Area. Where the party files a lawsuit based on the Contract, it shall prove the existence and establishment of said Contract.In judicial practice, one party is always prone to lose the case if it could not prove that the Contract in dispute has been concluded, taken into effect, or performed. There are two ways to prove the Contract has been established, taken into effect, and performed: (1) to prove all legal requirements for establishment of a contract have been fulfilled; (2) to prove the contract has been performed and the counterparty has received said performance. The requirements for establishment of the Contract generally include (a) there are two or more than two contracting parties, to wit, the actual contracting parties, which could be the party himself/herself/itself or the agent of the party. (b) The contracting parties enjoy civil rights and have civil capacity to enter into contracts. (c) Agreement has been reached on main terms and conditions. In judicial practice, disputes usually focus on whether the counterparty is the contracting party or whether the parties have reached agreement on certain issues. For instance, the counterparty could argue that it is not it to sign the delivery notes, goods-received notes, settlement statements, or invoices, and thus argues that it is not the party of the contract. The counterparty could also argue that there is no creditor’s name in the documents or vouchers such as the account reconciliation letters, confirmation letters of creditor’s rights, and thus holds that the party alleging the establishment of the Contract is not party of the Contract. Objectively, without written contract, it is hard for the party to present evidence proving that buyer and seller have reached an agreement.Therefore, it is of great importance for the parties to sign the Contract before doing business. If there was no contract, the contractual parties shall save evidence taking shape in the course of performing contract, such as faxes, emails, goods delivery notes, cargo-received notes, settlement statements, invoices, account reconciliation letters, confirmation letters on creditor’s rights, and other documents or vouchers signed by the counterparty. Above-mentioned documents could be used as evidence when filing a lawsuit to settle disputes.
