Breach of Contract

Breach of Contract in foreign trade refers to a situation where one party fails to perform, or does not fully perform, its contractual obligations without justified reason. Common scenarios include: the seller's failure to deliver on time, non-conforming goods, the buyer's failure to open a letter of credit or make payment on schedule, and discrepancies in documents. Determining a breach requires consideration of the contract terms, international trade practices (such as the CISG), and applicable law. Legal consequences include damages, specific performance, contract termination, and payment of liquidated damages. Unlike force majeure, a breach typically results from one party's fault, whereas force majeure may exempt liability; compared with a fundamental breach, an ordinary breach does not necessarily give the other party the right to terminate. Foreign trade practitioners should note: the contract should clearly stipulate liability for breach, claim periods, and dispute resolution methods; when a breach occurs, promptly collect evidence and issue written notice to avoid being deemed to have waived rights due to silence or delay.