Who is the counterparty to the sales contract without signing a written contract?
2024-06-05
In a sales contract dispute case, due to the absence of a written contract, the plaintiff listed all relevant parties as being sued to the court and demanded joint payment of the goods. In this situation, how to identify the subject of the sales contract and then determine the responsibility of the contract? Recently, the People's Court of Qidong City, Jiangsu Province, following the principle of contractual relativity, determined the defendant Hongdu Shanghai Branch as the responsible party and awarded the plaintiff Qiyang Company a payment of 286584.21 yuan and a penalty for overdue payment. After trial, the court found that on December 25, 2018, Hongdu Shanghai Branch and Mengti Company signed a project cooperation contract, which stipulated that Mengti Company would contact and undertake the construction of the second phase curtain wall doors and windows of an industrial park on its own. The construction general contract would be signed with the industrial park company in the name of Hongdu Shanghai Branch, and the two parties would complete the project through project cooperation. The representative office of Party B in this contract has the signature of Li Mouchun. After the contract was signed, Li Mouchun was responsible for on-site management of the project involved, while Zhu Moumin organized some workers to carry out construction and was responsible for purchasing materials. In 2020, through the introduction and contact of Zhu Moumin, the plaintiff Qiyang Company supplied glass to the industrial park project from November 2020 to February 2021, and the supply quantity was confirmed by Zhu Moumin. The plaintiff submitted 11 sales invoices, with a total supply payment of 366189.25 yuan. The shipping documents are all printed copies. The customer's name is Qingluo Company, the contact person is Zhu Moumin, and the delivery address is Industrial Park. After the supply, the plaintiff issued a value-added tax special invoice with the title of Hongdu Shanghai Branch and a total amount of 967560.62 yuan according to Zhu's request. Hongdu Shanghai Branch made a total payment of 680978.41 yuan to the plaintiff. The plaintiff claims outstanding payment based on the invoiced amount and the paid amount. On November 6, 2022, Hongdu Shanghai Branch, Mengti Company, and Zhu Moumin signed a tripartite agreement, which stipulated that Hongdu Shanghai Branch and Mengti Company must ensure that they do not misappropriate the industrial park project funds after receiving them. They should arrange the 200000 yuan advance payment and Zhu Moumin's labor costs as soon as possible. The unit and material costs introduced by Zhu Moumin should also be arranged as soon as possible. The second item of the unpaid amount in the agreement states that the payment for goods from Qiyang Company is 286584.21. The second party in the lower right corner of this agreement is personally signed by Li Mouchun. It was also found that on November 3, 2020, Hongdu Shanghai Branch paid the plaintiff 62288.80 yuan for the goods according to Li's instructions. On December 28, 2020, Mr. Lu transferred 215000 yuan to the Shanghai branch of Hongdu. The next day, Hongdu Shanghai Branch paid 161805.99 yuan to the plaintiff and 52991 yuan to Xiangchao Company according to Li Mouchun's instructions. Further investigation revealed that the investor of Qingluo Company is Mr. Lu, and the company's contact phone number is the same as that of Mengti Company, both of which are the contact information of Mr. Li. The Lu family and Li Chun have a father son relationship. The legal representative of Mengti Company was changed from Mr. Lu's family to Mr. Li on June 26, 2019. During the trial, the plaintiff claimed that they had previously signed a sales contract with Mengti Company, but the contract could no longer be found. The plaintiff had supplied glass to Mengti Company and issued an invoice to Mengti Company, and the payment for the goods was made by Mengti Company. Before the lawsuit in this case, the payment for the goods of Mengti Company had been settled. After the trial, the Qidong Court believes that the focus of the dispute in this case is who is the counterparty to the sales contract involved. Based on the statements and evidence presented by all parties in the trial, combined with the original application, the court has determined that the defendant, Hongdu Shanghai Branch, should be the counterparty to the sales contract in question. Firstly, the sales contract involved in the case did not have a written contract. The evidence submitted by the plaintiff, such as the sales delivery note and value-added tax special invoice, can prove that the plaintiff supplied glass to the industrial park project involved in the case. The project involved in the case was contracted by Hongdu Shanghai Branch and subcontracted to Mengti Company. The specific construction organization of Mengti Company was completed. Li Mouchun was the on-site person in charge of the project, and Zhu Moumin organized some workers to carry out the construction and was responsible for purchasing relevant materials. The goods involved in the case were all contacted by Zhu Moumin and confirmed by Zhu Moumin. The plaintiff stated that they had signed a sales contract with Mengti Company and issued an invoice to Mengti Company. Mengti Company has settled the payment for the goods, and the subsequent supply will be to Hongdu Shanghai Branch. The invoicing and payment are consistent. Secondly, Hongdu Shanghai Branch confirmed with Li Mouchun the invoice received and made partial payments according to Li Mouchun's instructions, which is an internal relationship between Hongdu Shanghai Branch and Li Mouchun. Hongdu Shanghai Branch, Li Mouchun, or Zhu Moumin did not disclose this fact to the plaintiff and is not binding on the plaintiff. The tripartite agreement is an internal agreement between Hongdu Shanghai Branch, Mengti Company, and Zhu Moumin regarding the confirmation and payment of relevant funds, which confirms the fact that there is a debt of 286584.21 yuan owed to the plaintiff. The payment condition stipulated in this agreement is "upon receipt of payment for a certain industrial park project in Qidong". The achievement of this payment condition depends on the performance of the construction contract between the employer and the contractor. This agreement has not been signed and confirmed by the plaintiff, and this payment condition cannot bind the plaintiff. In fact, the plaintiff had already completed all the supply obligations as early as February 2021 and repeatedly demanded payment without success. The plaintiff only filed a lawsuit in this case on April 27, 2023, and the plaintiff's demand for payment of the goods had already given a reasonable performance period. Therefore, the defendant Hongdu Shanghai Branch should bear the responsibility of paying the plaintiff 286584.21 yuan for the goods. The court thus made the above judgment. After the first instance judgment, neither party filed an appeal, and the judgment in this case has taken effect. According to Article 465 (2) of the Civil Code of the People's Republic of China, a contract established in accordance with the law is only legally binding on the parties, except as otherwise provided by law. This clause reflects the relativity of the contract. The principle of relativity of contracts refers to the fact that contracts only have legal effect between specific contracting parties, and third parties other than the contracting parties are not allowed to claim contractual rights or assume contractual obligations. The proviso clause of "unless otherwise provided by law" is a breakthrough in the relativity of the contract, but only in exceptional circumstances, such as creditor's subrogation rights, third-party interest contracts, third-party performance on behalf of others, non breach of lease agreement, and contractor's priority in payment. The relativity of contracts limits the effectiveness of contracts to the parties involved, providing the possibility of legal order for the realization of autonomy of will. It is an important basis for identifying contract subjects and determining contract responsibilities in judicial judgments. With the rapid development of China's real estate industry, various problems such as illegal subcontracting, illegal subcontracting, and borrowing qualifications have emerged one after another, leading to an increasing number of construction contract disputes. The occurrence of this case is due to illegal subcontracting. When claiming rights, the plaintiff made a general treatment of the contract subject. In the lawsuit and court trial, it was not clear which defendant was selected as the counterparty to the contract. Instead, it listed directly, indirectly, or related personnel with a certain degree of involvement as defendants and demanded that they jointly assume responsibility. The Supreme People's Court, through the issuance of judicial interpretations, allows actual construction workers to break through the relativity of the contract and directly claim project funds from the contracting party with strong financial payment capabilities, with the aim of protecting the interests of migrant workers and maintaining social stability. And this case is a legal relationship of a sales contract, which is different from the legal relationship of a construction project construction or subcontracting contract. The principle of contract relativity should be followed to determine the responsible party. The identification of the counterparty to a contract should not be limited to the circumstances of the parties specified in the contract, but should be based on comprehensive judgments such as the process and content of contract signing, contract performance, etc., to accurately identify the parties to the contract relationship. In the trial of contractual relationships, the procedural choice rights of the parties should be respected, and parties related to the contract should be allowed to enter the litigation, ensuring that the parties fully exercise their procedural and substantive disposal rights. Based on the consideration of litigation interests, the parties entrust the counterparty of the contract to the court for determination. To prevent litigation accumulation, the court must use penetrating trial thinking to determine the true intentions of the parties, explore the true legal relationship, and resolve the dispute as much as possible in one go. The project involved in this case was contracted by Hongdu Shanghai Branch and subcontracted to Mengti Company. The specific construction organization of Mengti Company was completed. Li Mouchun was the on-site person in charge of the project, and Zhu Moumin organized some workers to carry out the construction and was responsible for purchasing relevant materials. During the trial, Mengti Company did not appear in court to respond, and the other defendants did not consider themselves as counterparties to the contract and refused to assume responsibility for payment of the goods. The plaintiff issued a full invoice to Hongdu Shanghai Branch in accordance with Zhu Moumin's instructions, and Hongdu Shanghai Branch also paid a portion of the payment. As a goodwill counterparty, the plaintiff has reason to believe that Hongdu Shanghai Branch is the counterparty to the contract. In addition, both parties were supplying goods to the project involved in the case. In the early stage of supply, the plaintiff signed a contract with Mengti Company and issued an invoice to Mengti Company according to Zhu's instructions. Mengti Company has settled the payment for the goods. The plaintiff adopted the same transaction model for the later supply, which is the supply involved in the case. The changes in the payment subject before and after are due to changes in the subcontracting subject of the project in question. Therefore, the court determined that the defendant, Hongdu Shanghai Branch, should be the counterparty to the sales contract in question. (Lai Xin She)
Edit：Chenjie Responsible editor：Wang Chen
Source：http://rmfyb.chinacourt.org
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