of September 25, the Shandong High Court held a press conference on the trial of sales contract disputes in the provincial courts, and released ten typical cases of sales contract disputes in Shandong courts in 2022. The tenth case is a contract dispute between a solar energy company and a power company.
The details of the case are as follows:
[Basic facts of the case]
a power company and a solar energy company signed the Photovoltaic Module Order Contract on July 20, 2021, which stipulated that a solar energy company would provide a power company with a unit price of 1.65 yuan per group. Photovoltaic modules with a total price of 667764286 yuan are used for overseas projects contracted by a power company; the unit price and total price are fixed within the validity period of the contract; if the supplier terminates the performance of the contract obligations at will, it shall bear 30% of the contract amount for breach of contract; If the Supplier fails to deliver the goods as scheduled due to the market factors of force majeure such as the violent fluctuation of the price of raw materials, both parties shall solve the problem through friendly negotiation. If the Parties reach a consensus through negotiation and the Purchaser agrees to exempt the Supplier from the liability for breach of contract, the Purchaser shall not require the Supplier to bear the above liability for breach of contract on the grounds that the Supplier fails to fulfill its contractual obligations. Later, a solar energy company asked for a price increase on the grounds that the price of raw materials in the photovoltaic industry had risen due to the implementation of the national energy consumption control policy. The two sides did not reach an agreement, and a solar energy company refused to perform the contract. An electric power company separately signed an order contract with a company outside the case, with a total expenditure of 770947005.94 yuan. A power company sued the court and asked a solar energy company to pay a liquidated damages of 200329285.8 yuan. A solar energy company argued that the principle of change of circumstances should be applied in this case and that it did not constitute a breach of contract.
[Judgment Result]
The People's Court, after hearing, held that although Article 533 of the Civil Code of the People's Republic of China stipulates the principle of change of circumstances, the factors causing the sharp fluctuation of the price of raw materials for photovoltaic modules in this case include the relevant policies of the state's energy dual-control, the sanctions imposed by the United States on photovoltaic enterprises in Xinjiang, and so on. It has been published or implemented before the contract is signed. As a rational business entity, a solar energy company should be able to foresee the impact. Referring to the data published on the website of PV InfoLink recognized by both parties, the price data of PV supply chain in the first half of 2021 has shown a continuous upward trend. When a solar energy company signed an order contract with a power company on July 20, 2021, the price trend should be predicted. Both parties voluntarily agree that the unit price and total price of the contract shall be fixed, and neither party shall claim to adjust the price. As a contract with a long performance period, the price is not adjusted, which has the same commercial risk for both buyers and sellers. As a mature commercial entity specializing in the photovoltaic industry for a long time, the two companies should abide by their commitments regardless of the consideration of commercial interests and voluntarily assume possible commercial risks. Therefore, the principle of change of circumstances is not applicable in this case, a solar energy company requires the contract price to "follow the market", which violates both the contract agreement and good faith, and should bear the corresponding liability for breach of contract.
[Typical significance]
The principle of change of circumstances is an adjustment to the autonomy of the parties in order to achieve contract justice. However, this adjustment must be limited to the very necessary circumstances, that is, the strict adherence to the contract is the principle, and the change of circumstances is the exception. To judge whether a change in an objective situation is a normal commercial risk or a "major change" that can cause the application of the principle of change of circumstances, the law can not set a unified standard, but can only make a specific judgment in a case based on all aspects of the situation, not simply on the size of the price rise or fall, the difficulty of contract performance and so on. In this case, the price of commodity raw materials refers to the international market price index. As an important part of the global economy, the price trend of the energy market is affected by multiple factors, such as supply and demand, market expectations, domestic and international macro-policy environment, etc. Rational business entities should foresee the impact of various factors and reasonably predict the price trend. Moreover, the non-adjustment of the contract price has the same commercial risk for both buyers and sellers, so the principle of change of circumstances is not applicable in this case.
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