Where the earnest money is not su cient to compensate the losses caused by one party’s default, the other
party may request compensa on for the losses in excess of the amount of the earnest money.
Ar cle 589 Where a debtor performs his obliga on in accordance with the agreement, and the creditor
refuses to accept the performance without just cause, the debtor may request the creditor to compensate
for any addi onal expenses.
The debtor does not need to pay interests for the period of delay in acceptance by the creditor.
Ar cle 590 Where a party is unable to perform the contract due to force majeure, he shall be exempted from
liability in whole or in part according to the impact of the force majeure, unless otherwise provided by law.
The party unable to perform the contract due to force majeure shall promptly no fy the other party to
mi gate the losses that may be caused to the other party, and shall provide proof of the force majeure
within a reasonable period of me.
Where the force majeure occurs a er a party’s delay in performance, such party’s default liability shall not
be exempted.
Ar cle 591 A er a party defaults, the other party shall take appropriate measures to prevent further loss.
Where the loss is aggravated due to the failure of taking appropriate measures, no compensa on shall be
claimed for the aggravated part of the losses.
The reasonable expenses incurred by a party in preven ng the aggrava on of the loss shall be borne by the
breaching party.
Ar cle 592 Where both par es default, each shall bear corresponding liabili es.
Where one party’s default causes loss to the other party, and the other party’s fault contributes to the
occurrence of such loss, the amount of compensa on may be mi gated accordingly.
Ar cle 593 A party who breaches a contract due to a third person’s reason shall bear default liability to the
other party in accordance with law. The dispute between the breaching party and the third person shall be
handled in accordance with the provisions of law or their agreement.
Ar cle 594 The limita on period for ling a lawsuit or applying for arbitra on on a dispute arising from a
contract for interna onal sale of goods and a contract for the import and export of technology is four years.
Part Two Typical Contracts
Chapter IX Sales Contracts
Ar cle 595 A sales contract is a contract under which a seller transfers his ownership over the subject ma er
to a buyer who pays the price in return.
Ar cle 596 A sales contract generally contains clauses specifying the name, quan ty, quality, and price of the
subject ma er, the me period, place, and method of performance, the packaging, the standard and
methods for inspec on, the mode of se lement, the language used in the contract, the validity thereof, and
the like.
Ar cle 597 If the ownership of a subject ma er is unable to be transferred owing to the fact that the seller
fails to obtain the right of disposal, the buyer may rescind the contract and request the seller to bear default
liability.
Where there are laws, administra ve regula ons prohibi ng or restric ng the transfer of a subject ma er,
such provisions shall be followed.
Ar cle 598 A seller shall perform its obliga on of delivering the subject ma er or the documents for taking
delivery thereof, and transferring the ownership over the subject ma er to the buyer.
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