Unlike the previous Contract Law,Article 581 of the Civil Code stipulates substitute performance as a general remedy for breach of contract.Although this article seems to comprehensively regulate the constituent elements and legal effects of the substitute performance,its specific application is confronted with the problem of insufficient norm.On one hand,Article 581 only stipulates two elements:the debtor's breach of contract and"the debt is not subject to specific performance".Considering the characteristics of substitute performance and the balance of interests between the parties,the following requirements should also be met:(1)the debt is substitutable;(2)substitute performance must be reasonable;(3)the creditor must inform the debtor of the choice of substitute performance.Since the Contract Law does not adopt the principle of specific performance as a priority,when rule-oriented supplementation is conducted toward Article 581,"the creditor granting a grace period to the debtor before the substitute performance"should not be considered as a prerequisite for the exercise of the right to substitute performance.On the other hand,the legal effect of Article 581 which means the expense of substitute performance shall be borne by the debtor,only apply to cases where the above-mentioned constituent elements are met(lawful substitute performance),thus Article 581 cannot respond to the issue of whether the expense of substitute performance should be borne by the debtor and how to bear such expense in cases where the constituent elements are not satisfied(unlawful substitute performance),and different situations need to be discussed separately.The expense paid by the creditor for unlawful substitute performance can be shifted to the debtor through claim for compensation or claim for restitution of unjust enrichment at the time of satisfying certain preconditions.However,"unlawful substitute performance"may damage the interest of the debtor,so not all expenses of substitute performance may be shifted to the debtor,and corresponding deduction shall be made.
Lawful Substitute PerformanceUnlawful Substitute PerformanceSpecific PerformanceCure by Non-performing Party
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