Nature and Specific Determination of Substituted Performance Agreements
DOI:
https://doi.org/10.54691/t1h0g976Keywords:
Substituted performance; Consensual contract; Real contract; Novation.Abstract
Article 27 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the General Provisions of Contracts in the Civil Code of the People's Republic of China, which came into effect in December 2023, explicitly stipulates the consensual nature of substituted performance agreements. To conduct a specific analysis of the underlying reasons for this stipulation, it is essential to proceed from the legislative purpose and the intrinsic nature of contracts themselves. Specifically, the parties to a substituted performance agreement do not stand in an unequal relationship with respect to the distribution of interests; therefore, such agreements should not be characterized as real contracts. Concerning the legal nature of substituted performance agreements, the theory of debt modification contracts should be adopted to preserve the identity of the original debt relationship. Furthermore, under the premise of acknowledging their consensual nature, it has become practically unnecessary to distinguish between substituted performance and novation in judicial practice.
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