Question

1. Please explain the relationship between the following two articles(They are taken from some country’s CONTRACT LAW).

a) “If a party fails to perform its obligations under a contract, or its performance fails to satisfy the terms of the contract, it shall bear the liabilities for breach of contract such as to continue to perform its obligations, to take remedial measures, or to compensate for losses.”

b) “A party who is unable to perform a contract due to force majeure is exempted from liability in part or in whole in light of the impact of the event of force majeure, except otherwise provided by law. Where an event of force majeure occurs after the party's delay in performance, it is not exempted from such liability.

2. Compare the following two articles. Firstly, LIST the differences between the two. Secondly, EXPLAIN the reason for the amendment of the law.

Current Article:

Every shareholder shall be entitled to review and duplicate the company’s bylaw, the minutes of the shareholders’ meetings, the resolutions of the board of directors’ meetings, the resolutions of the board of supervisors’ meetings, as well as the financial reports.
Every shareholder may request to review the accounting books of the company. Where a shareholder requests to review the accounting books of the company, it shall submit a written request, which shall state his motives. If the company, has the legitimate reason to believe that the shareholder’s requests to review the accounting books has an improper motive and may impair the legitimate interests of the company, it may reject the request of the shareholder to review the books and shall, within in 15 days after the shareholder submits a written request, give the shareholder a written reply, which shall include an explanation. If the company reject the request of any shareholder to review the accounting books, the shareholder may plead a people’s court to demand the company to open the books for his review.

Old article :

Every shareholder shall be entitled to review the minutes of the shareholders’ meetings as well as the financial reports.

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Answer 1

1. These articles describe the liability of breach in two cases.The first one provides that where a party fails to perform the contract obligations or its performance fails to satisfy the terms of the contract, the party shall bear such liabilities for breach of contract as to continue to perform its obligations, to take remedial measures, or to compensate for losses.The contention is that if this article has unrestrained the fault principle and has adopted the strict liability principle instead.Is is argued that this article has adopted the strict liabilty principle on parties. The second article is- in case that a contract is not able to be performed because of force majeure, the liabilities shall be exempted in part or wholly in light of the effects of force majeure, except as otherwise stipulated by law. If the force majeure occurs after one party has delayed in performance, the liability may not be exempted. The relationship between them is that the first article is reinforced in the second one.i.e. the first article is supported in the second article, although it tends not to.and therefore the primary notion of second article is that a force majeure may not neccesarily exempt a party from contractual obligations.

2.The diiference between the old article and article after amendment is that ( as stated in the question) - 1.Before shareholders were not given the right of duplicating anything. but after amendment they have been given this right in the new article. 2. In the old article, they are not given the right of reviewing the company's bylaws, resolutions of the board of directors’ meetings and supervisor's meetings but in the new article it is clearly stated that they have the right to do so. They also got court's support in the new articlei.e. the article after amendment.

The reason for amendment is to protect the right of shareholders. This would prevent them from being frauded or used by the company in any wrong way. They should have the right to view all these as they invest their money into the company and made it progress possible.