PerformancePerformance

Modes and Manner of performanceModes and Manner of performanceThe Justified Repudiation to PerformanThe Justified Repudiation to Performancece

Extent of PerformanceExtent of Performance

By virtue of an obligation, the creditor is By virtue of an obligation, the creditor is enentitled to claim a prestationtitled to claim a prestation from the debtor. from the debtor.A prestation may consist in something whiA prestation may consist in something which cannot be valued in money.ch cannot be valued in money.A prestation may consist in forbearance. A prestation may consist in forbearance. (ROCCC Article 199)(ROCCC Article 199)

Modes of PerformanceModes of Performance

Duty to actDuty to act– Property contractProperty contract

Conveyance property rightConveyance property right

DeliveryDelivery

Payment of price of remuneration Payment of price of remuneration

– Service contractService contractTender of serviceTender of service

Duty of ForbearanceDuty of Forbearance

Conveyance of the Right in RemConveyance of the Right in Rem

Real estateReal estate– Through the other Juristic ActThrough the other Juristic Act

Written contract requiredWritten contract requiredRecordationRecordation

– As an effective element (PRC, ROC, Korea)As an effective element (PRC, ROC, Korea)– As an evidence to against the third person (JCC)As an evidence to against the third person (JCC)

Chattels (Movables)Chattels (Movables)– DeliveryDelivery

As an effective element (PRC, ROC, Korea)As an effective element (PRC, ROC, Korea)As an evidence to against the third person (JCC)As an evidence to against the third person (JCC)

Conveyance of the Right in Rem in Korea Civil CodeConveyance of the Right in Rem in Korea Civil Code

Article 186 (Effect of Changes in Real Rights over Immovables)Article 186 (Effect of Changes in Real Rights over Immovables) – The acquisition, loss of, or any alteration in, The acquisition, loss of, or any alteration in, a real right by a juristic acta real right by a juristic act

over an immovable over an immovable takes effect upon its registrationtakes effect upon its registration. . Article 188 (Effect of Changes in Real Rights over Movables, Article 188 (Effect of Changes in Real Rights over Movables, Summary Assignment)Summary Assignment) – (1) The assignment of (1) The assignment of real rights over movablesreal rights over movables takes effect by deliverytakes effect by delivery of of

the Article. the Article. – (2) When an assignee possesses a movable, the assignment takes effect (2) When an assignee possesses a movable, the assignment takes effect

by a mere declaration of such intention by the parties. by a mere declaration of such intention by the parties. Article 189 (Agreement on Possession)Article 189 (Agreement on Possession) – If If real rights in movablesreal rights in movables are to be assigned and the assigner is to are to be assigned and the assigner is to

continue possessing the Articles in accordance with a contract concluded continue possessing the Articles in accordance with a contract concluded by the parties, it shall be regarded that the Articles have been delivered to by the parties, it shall be regarded that the Articles have been delivered to the assignee. the assignee.

Article 190 (Assignment of Claim for Return of Object)Article 190 (Assignment of Claim for Return of Object) – In a case where real rights to a movable possessed by a third party are In a case where real rights to a movable possessed by a third party are

assigned, if the assigner assigns to the assignee the claim for return of the assigned, if the assigner assigns to the assignee the claim for return of the movable possessed by the third party, it shall be regarded that the movable possessed by the third party, it shall be regarded that the movable has been delivered.movable has been delivered.

Conveyance of the Right in Rem in PRC GPCL & CLConveyance of the Right in Rem in PRC GPCL & CL

GPCL Article 72. GPCL Article 72. – Property ownership shall not be obtained in violation oProperty ownership shall not be obtained in violation o

f the law. f the law. – Unless the law stipulates otherwise or the parties conUnless the law stipulates otherwise or the parties con

cerned have agreed on other arrangements, cerned have agreed on other arrangements, the ownethe ownership of property obtained by contract or by other lawfrship of property obtained by contract or by other lawful means shall be transferred simultaneously with the ul means shall be transferred simultaneously with the property itselfproperty itself. .

Contract Law Article 133 (Passing of Title)Contract Law Article 133 (Passing of Title)– Title to the subject matter Title to the subject matter passes at the time of its passes at the time of its

deliverydelivery, except otherwise provided by law or agreed , except otherwise provided by law or agreed by the parties. by the parties.

Conveyance of the Right in Rem in ROC Civil CodeConveyance of the Right in Rem in ROC Civil Code

Article 758Article 758– The acquirement, creation, loss and alternation of rights in rem of real property thThe acquirement, creation, loss and alternation of rights in rem of real property th

rough the juridical act rough the juridical act will not effect until the recordation has been madewill not effect until the recordation has been made..Article 760Article 760– The transfer or creation of rights in rem of real property The transfer or creation of rights in rem of real property shall be made in writingshall be made in writing..

Article 761Article 761– The transfer of rights in rem of personal property will not effect until the personal The transfer of rights in rem of personal property will not effect until the personal

property has been delivered.property has been delivered. 　　 However, if the transferee has been in possessioHowever, if the transferee has been in possession of the personal property, the transfer effects when the parties agree to such tran of the personal property, the transfer effects when the parties agree to such transfer.nsfer.

– In the transfer of a right in rem of personal property, where the transferor is still in In the transfer of a right in rem of personal property, where the transferor is still in possession of it, a contract causing the transferee to acquire its indirect possessipossession of it, a contract causing the transferee to acquire its indirect possession may be made between the parties in the place of its delivery.on may be made between the parties in the place of its delivery.

– In the transfer of a right in rem of personal property, where a third party is in possIn the transfer of a right in rem of personal property, where a third party is in possession of it, the transferor may transfer the claim against such third party for the ression of it, the transferor may transfer the claim against such third party for the return of it to the transferee in place of its delivery.eturn of it to the transferee in place of its delivery.

Conveyance of the Right in Rem in Japan CiConveyance of the Right in Rem in Japan Civil Codevil Code

Article 176Article 176– The creation and transfer of real rights shall take effecThe creation and transfer of real rights shall take effec

t only by a juristic act.t only by a juristic act.

Article 177Article 177– The acquirement, extinction, and alteration of real righThe acquirement, extinction, and alteration of real righ

ts in real property shall not be a legal reason against tts in real property shall not be a legal reason against third person without recordation in accordance with the hird person without recordation in accordance with the recordation laws and regulations.recordation laws and regulations.

Article 178Article 178– The transfer of real rights in movables shall not be a lThe transfer of real rights in movables shall not be a l

egal reason against third person without delivery. egal reason against third person without delivery.

The Manner to Perform Contractual DutyThe Manner to Perform Contractual Duty

The Principle of Full PerformanceThe Principle of Full Performance– The parties shall The parties shall fully performfully perform their respective their respective

obligations in accordance with the contract. (PRC CL obligations in accordance with the contract. (PRC CL Article 60) Article 60)

– If the debtor does not actually tender the performance If the debtor does not actually tender the performance according to the tenor of the obligationaccording to the tenor of the obligation, there will be n, there will be no effect on this tendering.o effect on this tendering. 　　 But if the creditor has preBut if the creditor has previously declared that he will not accept the performanviously declared that he will not accept the performance, or if an act of the creditor is necessary for the perfce, or if an act of the creditor is necessary for the performance, the debtor may substitute the notice to the cormance, the debtor may substitute the notice to the creditorreditor announcing that he (the debtor) is ready to perf announcing that he (the debtor) is ready to perform for the tenderingorm for the tendering. (ROC Civil Code Article 235) . (ROC Civil Code Article 235)

The Manner to Perform Contractual DutyThe Manner to Perform Contractual Duty

Performance in Good FaithPerformance in Good Faith– The parties shall abide by The parties shall abide by the principle of good faiththe principle of good faith, ,

and perform obligations such as and perform obligations such as notification, notification, assistance, and confidentialityassistance, and confidentiality, etc. in light of the , etc. in light of the nature and purpose of the contract and in accordance nature and purpose of the contract and in accordance with the relevant usage. (PRC CL Article 60)with the relevant usage. (PRC CL Article 60)

– A right shall be exercised and a duty shall be performA right shall be exercised and a duty shall be performed in a manner of ed in a manner of good faithgood faith (ROC CC Article 148) (ROC CC Article 148)

To whom performance can be made?To whom performance can be made?

ROC Civil Code Article 309ROC Civil Code Article 309– When performance has been made to the creditor or When performance has been made to the creditor or

to to his qualified representativehis qualified representative in conformity with the in conformity with the tenor of the obligation, and has been accepted, the tenor of the obligation, and has been accepted, the obligation is extinguished.obligation is extinguished.The The bearer of a receipt signed by the creditorbearer of a receipt signed by the creditor is is deemed to be the qualified representative of the deemed to be the qualified representative of the creditor, except the debtor knew or was negligent of creditor, except the debtor knew or was negligent of not knowing that the bearer was not qualified to not knowing that the bearer was not qualified to receive the performance.receive the performance.

Indeterminate TermsIndeterminate Terms

PRC CL Article 61      Indeterminate Terms; PRC CL Article 61      Indeterminate Terms; Supplementary AgreementSupplementary Agreement– If a term such as quality, price or remuneration, or If a term such as quality, price or remuneration, or

place of performance etc. was not prescribed or place of performance etc. was not prescribed or clearly prescribed, after the contract has taken clearly prescribed, after the contract has taken effect, effect, the parties may supplement it through the parties may supplement it through agreementagreement; if the parties fail to reach a ; if the parties fail to reach a supplementary agreement, such term shall be supplementary agreement, such term shall be determined in accordance with the relevant determined in accordance with the relevant provisions of the contract or in accordance with provisions of the contract or in accordance with the relevant usagethe relevant usage. .

Gap Filling ProvisionsGap Filling Provisions

PRC CL Article 62PRC CL Article 62– Where a relevant term of the contract was not clearly Where a relevant term of the contract was not clearly

prescribed, and cannot be determined in accordance with prescribed, and cannot be determined in accordance with Article 61 hereof, one of the following provisions applies:Article 61 hereof, one of the following provisions applies:

(i)     If quality requirement was not clearly prescribed, (i)     If quality requirement was not clearly prescribed, performance shall be in accordance with performance shall be in accordance with the state standard or the state standard or industry standardindustry standard; absent any state or industry standard, ; absent any state or industry standard, performance shall be in accordance with performance shall be in accordance with the customary the customary standard or any particular standard consistent with the standard or any particular standard consistent with the purpose of the contractpurpose of the contract;;(ii)    If price or remuneration was not clearly prescribed, (ii)    If price or remuneration was not clearly prescribed, performance shall be in accordance with performance shall be in accordance with the prevailing market the prevailing market price at the place of performanceprice at the place of performance at the time the contract was at the time the contract was concluded, and if adoption of a price mandated by the concluded, and if adoption of a price mandated by the government or based on government issued government or based on government issued pricing guidelinespricing guidelines is required by law, such requirement applies;is required by law, such requirement applies;

Gap Filling ProvisionsGap Filling Provisions

(iii)   Where the place of performance was not clearly (iii)   Where the place of performance was not clearly prescribed, if the obligation is payment of money, performance prescribed, if the obligation is payment of money, performance shall be shall be at the place where the payee is locatedat the place where the payee is located; if the ; if the obligation is delivery of immovable property, performance shall obligation is delivery of immovable property, performance shall be at the place where be at the place where the immovable property is locatedthe immovable property is located; for ; for any other subject matter, performance shall be any other subject matter, performance shall be at the place at the place where the obligor is locatedwhere the obligor is located;;(iv)    If the time of performance was not clearly prescribed, the (iv)    If the time of performance was not clearly prescribed, the obligor may perform, and the obligee may require performance, obligor may perform, and the obligee may require performance, at any timeat any time, provided that the other party shall be given the , provided that the other party shall be given the time required for preparation;time required for preparation;(v)     If the method of performance was not clearly prescribed, (v)     If the method of performance was not clearly prescribed, performance shall be rendered in a manner which is conducive performance shall be rendered in a manner which is conducive to realizing the purpose of the contract;to realizing the purpose of the contract;(vi)    If the party responsible for the expenses of performance (vi)    If the party responsible for the expenses of performance was not clearly prescribed, the obligor shall bear the expenses.was not clearly prescribed, the obligor shall bear the expenses.

Gap Filling ProvisionsGap Filling Provisions

ROC CC Article 310ROC CC Article 310– If the performance is tendered to a third party and has been accepted If the performance is tendered to a third party and has been accepted

by him, the following rules shall apply:by him, the following rules shall apply:(1) Performance effects if the creditor has acknowledged it or if the third (1) Performance effects if the creditor has acknowledged it or if the third party subsequently has acquired the claim of the obligation;party subsequently has acquired the claim of the obligation;(2) Performance effects, if the performance had been accepted by the quasi (2) Performance effects, if the performance had been accepted by the quasi possessor of the claim, and the creditor did not know that he is not a possessor of the claim, and the creditor did not know that he is not a creditor;creditor;(3) In cases other than those specified in the preceding two sections, the (3) In cases other than those specified in the preceding two sections, the performance effects only to the extent which the creditor has been benefited performance effects only to the extent which the creditor has been benefited thereby.thereby.Article 311Article 311

– An obligation may be performed by a third party unless otherwise An obligation may be performed by a third party unless otherwise agreed by the parties or accorded with the nature of the obligation.agreed by the parties or accorded with the nature of the obligation.If the debtor objects to the obligation being performed by a third party, If the debtor objects to the obligation being performed by a third party, the creditor may refuse such performance; but if the third party has the the creditor may refuse such performance; but if the third party has the interest of conflicts on the performance of the obligation, the creditor interest of conflicts on the performance of the obligation, the creditor shall not refuse.shall not refuse.

Place of performancePlace of performance

Otherwise provided by law or by the contract or by the custom, or Otherwise provided by law or by the contract or by the custom, or unless otherwise decided by the nature of the obligation or other unless otherwise decided by the nature of the obligation or other situations, the place of performance shall be decided as follows:situations, the place of performance shall be decided as follows:– (1) If the object of the obligation is to deliver a specific thing, (1) If the object of the obligation is to deliver a specific thing,

performance shall be tendered at the place where such thing was at the performance shall be tendered at the place where such thing was at the time when the contract was constituted.time when the contract was constituted.

– (2) The other obligations shall be performed at the place of the creditor's (2) The other obligations shall be performed at the place of the creditor's domicile. (RCC Article 314)domicile. (RCC Article 314)

Provided by lawProvided by law– The return of the thing deposited shall be made at the place where the The return of the thing deposited shall be made at the place where the

thing was to be kept.thing was to be kept.If the depositary has removed the thing to another place in accordance If the depositary has removed the thing to another place in accordance with the provisions of Article 592 or 594, the return may be made at the with the provisions of Article 592 or 594, the return may be made at the place where the thing actually is. (RCC Article 600 )place where the thing actually is. (RCC Article 600 )

– If the delivery of the object sold and the payment of the price shall take If the delivery of the object sold and the payment of the price shall take place simultaneously, the price shall be paid at the place of delivery.place simultaneously, the price shall be paid at the place of delivery.(RCC Article 371)(RCC Article 371)

Time of performanceTime of performance

Unless otherwise provided by law or by the contract, or unless otherUnless otherwise provided by law or by the contract, or unless otherwise decided by the nature of the obligation or other situations, wise decided by the nature of the obligation or other situations, the cthe creditor may demand the performance at any time and the debtor mareditor may demand the performance at any time and the debtor may also perform at any time. y also perform at any time. (RCC Article 315)(RCC Article 315)provided by lawprovided by law– If a remuneration has been agreed upon, it is payable at the termination If a remuneration has been agreed upon, it is payable at the termination

of the deposit.of the deposit. 　　 If the remuneration is fixed by periods, it is payable at tIf the remuneration is fixed by periods, it is payable at the end of each period. (RCC Article 601)he end of each period. (RCC Article 601)

– Unless otherwise provided, by the act, by contract or by customs, the deUnless otherwise provided, by the act, by contract or by customs, the delivery of the object sold and the payment of the price shall take place silivery of the object sold and the payment of the price shall take place simultaneously. (RCC Article 369)multaneously. (RCC Article 369)

– The lessee shall pay the rental at the agreed date and in the absence of The lessee shall pay the rental at the agreed date and in the absence of such agreed date, according to customs; and in the absence of such agrsuch agreed date, according to customs; and in the absence of such agreement or customs, the rental shall be paid at the termination of the leaeement or customs, the rental shall be paid at the termination of the lease.se.　　 If the rental is paid periodically, it shall be paid upon the end of eaIf the rental is paid periodically, it shall be paid upon the end of each of the periods. If there is a season for the collection of profits from thch of the periods. If there is a season for the collection of profits from the thing leased, the rental shall be paid at the end of such season. (RCC e thing leased, the rental shall be paid at the end of such season. (RCC Article 439)Article 439)

Time of performanceTime of performance– The remuneration shall be paid at the time of delivery of the worThe remuneration shall be paid at the time of delivery of the wor

k, or, if no delivery can take place, shall be paid at the time of itk, or, if no delivery can take place, shall be paid at the time of its completion.s completion.If the work is to be delivered in parts and a separate remuneratiIf the work is to be delivered in parts and a separate remuneration has been specified for each separate part, the remuneration on has been specified for each separate part, the remuneration for each part shall be paid at the time of its delivery. (RCC Articlfor each part shall be paid at the time of its delivery. (RCC Article 505)e 505)

– The remuneration shall be paid at the agreed deadline, if, in the The remuneration shall be paid at the agreed deadline, if, in the absence of an agreement, according to customs.absence of an agreement, according to customs. 　　 In the abseIn the absence of an agreement and customs, the following rules shall be ance of an agreement and customs, the following rules shall be applied:pplied:(1) If the remuneration is fixed by periods, it shall be paid at the (1) If the remuneration is fixed by periods, it shall be paid at the end of each period.end of each period.(2) If the remuneration is not fixed by periods, it shall be paid at (2) If the remuneration is not fixed by periods, it shall be paid at the end of the services. (RCC Article 486)the end of the services. (RCC Article 486)

The Justified Repudiation to PerformThe Justified Repudiation to Perform

The Justified Repudiation to Perform in ROC Civil CodeThe Justified Repudiation to Perform in ROC Civil Code

Defense of Simultaneous PerformanceDefense of Simultaneous Performance– A party to a A party to a mutual contract mutual contract may refuse to perform hmay refuse to perform h

is part until the counter-prestation has been performeis part until the counter-prestation has been performed by the other party, except he is bound to perform fird by the other party, except he is bound to perform first.st.

– When one party has partially performed his part, the oWhen one party has partially performed his part, the other party shall not refuse his counter-prestation if circther party shall not refuse his counter-prestation if circumstances are such that a refusal to perform would bumstances are such that a refusal to perform would be against the manners of good faith.e against the manners of good faith.(RCC Article 264)(RCC Article 264)

The Justified Repudiation to Perform in ROC Civil The Justified Repudiation to Perform in ROC Civil CodeCode

Defense of InsecurityDefense of Insecurity– A person who is bound to perform his part first A person who is bound to perform his part first

may, if after the constitution of the contract thmay, if after the constitution of the contract the property of the other party have obviously de property of the other party have obviously decreased whereby the counter-prestation migecreased whereby the counter-prestation might become difficult to be performed, refuse to ht become difficult to be performed, refuse to perform his part, until the other party has perfperform his part, until the other party has performed his part or furnished security for such pormed his part or furnished security for such performance. (RCC Article 265)erformance. (RCC Article 265)

The Justified Repudiation to Perform in PRC CLThe Justified Repudiation to Perform in PRC CL

Defense of Simultaneous PerformanceDefense of Simultaneous Performance– Where the parties owe performance toward each other and there Where the parties owe performance toward each other and there

is no order of performance, the parties shall perform is no order of performance, the parties shall perform simultaneously. Prior to performance by the other party, one simultaneously. Prior to performance by the other party, one party is entitled to reject its requirement for performance. If the party is entitled to reject its requirement for performance. If the other party rendered non-conforming performance, one party is other party rendered non-conforming performance, one party is entitled to reject its corresponding requirement for performance. entitled to reject its corresponding requirement for performance. (Article 66)(Article 66)

        Defense of Subsequent PerformanceDefense of Subsequent Performance– Where the parties owe performance toward each other and there Where the parties owe performance toward each other and there

is an order of performance, prior to performance by the party is an order of performance, prior to performance by the party required to perform first, the party who is to perform required to perform first, the party who is to perform subsequently is entitled to reject its requirement for subsequently is entitled to reject its requirement for performance. If the party required to perform first rendered non-performance. If the party required to perform first rendered non-conforming performance, the party who is to perform conforming performance, the party who is to perform subsequently is entitled to reject its corresponding requirement subsequently is entitled to reject its corresponding requirement for performance. (Article 67)for performance. (Article 67)

The Justified Repudiation to Perform in PRC CLThe Justified Repudiation to Perform in PRC CL

Defense of InsecurityDefense of Insecurity – The party required to perform first may suspend its performance if it has The party required to perform first may suspend its performance if it has

conclusive evidence establishing that the other party is in any of the following conclusive evidence establishing that the other party is in any of the following circumstances:circumstances:

(i)     Its business has seriously deteriorated;(i)     Its business has seriously deteriorated;(ii)    It has engaged in transfer of assets or withdrawal of funds for the purpose of (ii)    It has engaged in transfer of assets or withdrawal of funds for the purpose of evading debts;evading debts;(iii)   It has lost its business creditworthiness;(iii)   It has lost its business creditworthiness;(iv)    It is in any other circumstance which will or may cause it to lose its ability to (iv)    It is in any other circumstance which will or may cause it to lose its ability to perform. (Article 68)perform. (Article 68)

– Where a party suspends performance without conclusive evidence, it shall be Where a party suspends performance without conclusive evidence, it shall be liable for breach of contract. (Article 68)liable for breach of contract. (Article 68)

– If a party suspends its performance in accordance with Article 68 hereof, it shall If a party suspends its performance in accordance with Article 68 hereof, it shall timely notify the other party. (Article 69)timely notify the other party. (Article 69)

– If the other party provides appropriate assurance for its performance, the party If the other party provides appropriate assurance for its performance, the party shall resume performance. After performance was suspended, if the other party shall resume performance. After performance was suspended, if the other party fails to regain its ability to perform and fails to provide appropriate assurance fails to regain its ability to perform and fails to provide appropriate assurance within a reasonable time, the suspending party may terminate the contract. within a reasonable time, the suspending party may terminate the contract. (Article 69)(Article 69)