D. The right to demur for concurrentperformance (tong shi lü xing kang bian quan)
　
　The right to demur for concurrentperformance refers to both contracting parties performing the obligations owedto each other at the same time. The request for this right can be rejectedprior to the performance by the requesting party or during the performance ifit is not according to the stipulations agreed upon
　　　　
　
　The following conditions establishthe right to demur for concurrent performance – Firstly, the parties have to bemutually obligated by virtue of a bilateral contract. This right springs fromthe principle of fairness derived from the mutually dependent nature (qian lian xing) of a bilateral contract.Therefore, this is not applicable to unilateral contracts and bilateralcontracts which are not complete or genuine. The mutual obligations of theparties must be borne out of one single contract. The right will not arise ifthe mutual obligations are borne out of 2 or more contracts even if the partiesshare an intimate relationship in reality. These obligations must be oweddirectly to each other. There must also be a connection between the obligationsthemselves
　　　　For example, if A sold a car to B and bought RMB500,000 worth of raw materialsfrom B, two separate contracts are formed.A cannot refuse to hand over the car simply because B has not passed him theraw materials. This is because there is no connection between the hand over ofthe raw material and the hand over of the car. Secondly, It istime for both partiestoperform their obligations at the same time. This is to fulfill the aim of theright to demur for concurrent performance, which is to ensure that both partiescan enjoy the benefits of completion of performance at the same time. If thenature of the contract is such that the date of completion for both obligationsare different, or that it is stipulated within the contract as such, thefirst-performing party cannot impose this right when the other party has notcompleted the performance of his obligation. Thirdly, the other party must havefailed to perform his obligation or perform it out of accordance with theagreed stipulations. To request for the right to demur for concurrentperformance, the requesting party must have already fulfilled its ownobligation owed to the other party. This fulfillment has to be in accordancewith the agreed stipulations within the contract. If the performance of oneparty is delayed, partially flawed or in any way contrary to the contract, canthe other party apply for the right? If a party who has not completed theperformance of its obligations, requests the other party to fulfill hisobligation, can the latter party use the right to demur for concurrentperformance?
　　　　ccording to Contract Law, one party has the right to reject the request forfulfillment of obligations if the requesting party did not comply with thestipulations agreed upon during performance
　　　　Fourthly, the obligations must be such that they are capable of beingperformed. If the obligations are no longer capable of being performed, thepurpose of the right to demur for concurrent performance – that of realizingboth obligations at the same time - will not be met. Consequently, no problemsrelating to this right will arise. As such, the contract shall be dischargedaccording to the relevant legal provisions.
　
　The advantages of the right to demurfor concurrent performance are a balance of interests between the parties,protection of their rights, preservation of normal transaction order, enhancement of the co-operation between parties, guaranteefor the performance of the contract and protection of the legal interests ofthe parties
　　　　The legal basis of this right is the mutuallydependent nature of bilateral contracts, whereby the existence of the parties’obligations and benefits are dependent on each other and that cause and effectare mutually reliant. This dependency is reflected in three areas. Firstly, in the formation of contract, where two opposingobligations, with mutually dependent conditions, arise from the same contract.When one obligation can no longer stand, the other obligation will similarly berendered ineffective. Secondly,thisdependency is also shown when the performance of one’s obligations isconditional upon another’s. Therefore, if one party fails to perform, theperformance by the other party will inevitably be affected. Finally, in theexistence and continuation of dependency, the problem of liability arises if,without the fault of either party, the contract is rendered incapable ofperformance.
　　　　he pre-requisite to effect this right lies in the consequences brought aboutby dependency.
　
　
　E. The Right to Demur For Later Performance (hou lü xing kang pian quan)
　
　In a situation whereby thefirst-performing party fails to perform, due either to delays or serious flaws(in his performance), the other party can refuse to perform hiscounter-obligation in order to protect his interest. This is the right to demurfor later performance. Of course, this system can only operate in accordancewith the terms of the contract or legal provisions. This right belongs to theclass of suspended rights (yan qi kangbian quan) and can only prevent the opposing party from exercising hisright of claim on a temporary basis; it is not a permanent right (yong jiu kang bian quan), Once the earlier party fulfills its obligations, this rightextinguishes and the latter has to fulfill its obligation. The earlier party isto be held responsible for the breach of the contract, either by delayed ornon-substantial (incomplete) performance.
　
　The theory of China’s law of contract only includesregulations concerning the right to demur for concurrent performance and theright to demur when adversely affected. It does not provide for regulationspertaining to the right to demur for later performance. The system of the rightto demur for later performance is established after Contract Law adopted therelevant regulations in the International Commercial Contract Rules
　　　　This has great impact on both theoretical discussions and practicalapplications. The doctrine helps to distinguish the problem arising from breachof contract by one party and that arising from both parties by demarcating theparties’ responsibilities. It is commonplace in judicial practice that oneparty breaches the contract first, leading to the other party to terminateperformance in order to protect his legal interest. In such a situation, thecourt will normally rule that both parties are in breach and subsequently, bothwill be held responsible. This is not only unfair to the latter party, it isalso too lenient in dealing with the former party’s act of breach. This iswhere the right to demur for later performance steps in. It clearly reflectsthe right ——obligationrelationship between the parties involved ——where one party’s breach leads to the termination of performance by another,helping to identify the nature of the parties’ conduct and responsibilitiesarising from the breach.
　
　The requirements for the right areas follows – firstly, the contracthas to be a bilateral one and there must be in existence a casual relationshipbetween the obligations of both parties. Unilateral contracts such as donationcontracts will not lead to problems relating to the right. Secondly, there mustbe a chronological order for the performance of obligation. This order can bedetermined by regular course of dealing, such as the payment of hotel fees onlyafter staying and the purchase of tickets prior to boarding a plane or train.Thirdly, the latter party can only request for this right if the other partyfails to perform or performs contrary to the contract. For example, if it isstipulated in the contract that payments will only be made upon delivery, thebuyer can refuse to make the payments prior to the delivery of goods.
　
　Both the right to demur for later performance and theright to demur when adversely affected occur during the course of performanceand are aimed at protecting a party’s rights from being infringed. However, theright to demur when adversely affected can only be used by the earlier partywhile the right to demur for later performance is for the exclusive use of thelater party. The right to demur when adversely affected operates on the basisthat there is a risk that there will be no performance while the right to demurfor later performance is applicable only when the breach has already beenobjectively established. For the right to demur when adversely affected, theparty needs to notify the other party so as to give the latter a chance toadduce evidence or provide a guarantee. For the right to demur for laterperformance, there is no such need as the opposing party has already committeda breach, therefore, a pleading can be filed immediately.
　
　The later-perfor, ming partyhas to take notice of the temporal nature of the right to demur for laterperformance. Once the first-performing party fulfils his obligation, this rightwill extinguish and the later-performing party will also have to fulfil hisobligation. Otherwise, his actions may constitute a breach. The establishmentof this right completes and enhances the system for the right to demur whenadversely affected by balancing the interests of the parties and pushingfairness and justice to a higher notch.

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