Wonderful cases | Looking at the path of retrial rights protection from losing cases: How to dig up "hidden laws"
Author | Attorney Xu Xiulan
One
Basic Facts of the Lost Case
Ms. Guo, an American citizen of Chinese descent (pseudonym), purchased a commercial property in Area A in 2011, paying the full price of RMB 643,349 and entrusting Developer B Company with its rental management. Due to B Company’s debt disputes, the property in question was seized in 2021. Ms. Guo filed a lawsuit objecting to the enforcement, but both the first-instance and second-instance courts dismissed her claim on the grounds of “failure to sign a formal sales contract” and “neglecting to exercise her rights.”
Two
Case Experience and Lessons Learned
1. The court determined that the “Purchase Agreement” constitutes an informal sales contract;
2. It is argued that Ms. Guo, from the time she made the payment in 2016 until the property was sealed in 2021, failed to actively pursue the transfer of ownership and thus bears some fault;
3. The exemption reason citing the inability to return home for signing due to the pandemic was not accepted.
Three
The lawyer provides a further analysis.
Attorney Guo’s counsel failed to invoke Article 127 of the “Minutes of the National Court Conference on Commercial Trials,” resulting in the court’s mechanical application of Article 28 of the “Provisions on Review of Objections to Enforcement,” thereby overlooking the scope for determining “reasonable and objective grounds.”
1. A viable breakthrough in the case: Article 127 of the “Minutes of the National Court Conference on Commercial Trials”
Article 127 of the “Minutes of the National Courts’ Conference on Civil and Commercial Trials” (hereinafter referred to as the “Nine Civil Minutes”) provides an expansive interpretation of the phrase “failure to transfer ownership not attributable to the buyer’s own reasons”: “Even if the buyer has not taken any active steps (such as submitting transfer documents), if there are reasonable and objective grounds for not completing the transfer, the conditions may still be deemed to be met.”
2. The three main areas of application in this case
Dispute over the nature of the contract
Court Misconception: Denying the validity of a contract solely on the basis of its name.
Action recommendation: The agreement should be reviewed to determine whether it includes the essential terms set forth in Article 16 of the Measures for the Administration of Commodity Housing Sales (e.g., the subject matter, price, and payment method). By comparing the terms of the agreement with the essential elements of a sales contract, it is argued that the “Purchase Agreement” in substance possesses contractual validity.
The Rationality of “Failing to Assert One’s Rights”
Court Misconception:Demanding that the buyer take the initiative to release the mortgage while neglecting the developer’s primary contractual obligations.
Action Recommendation:If the developer fails to release the mortgage as agreed (within 90 working days after payment, as stipulated in the agreement), the buyer may also be exempt from liability if it does not actively assert its rights. New lines of evidence could focus on the mortgage registration records showing that the developer failed to promptly release the mortgage; as well as evidence from other homebuyers during the same period regarding similar circumstances (to demonstrate the developer’s systemic breach of contract).
The pandemic as a “reasonable and objective reason”
Court Misconception: holds that failure to assert one’s rights within five years prior to the pandemic constitutes negligence.
Action Recommendation:In 2021, the release of the lien coincided with entry restrictions (as announced by the Ministry of Foreign Affairs on March 28, 2020), which constitutes a force majeure event.
Evidence to Reinforce the Case: Email and WeChat records from August 2021 in which the developer notified the party to sign the contract; documents on entry‑exit control policies and the individual’s passport records, demonstrating that the pandemic objectively prevented the party from returning to China to sign the contract, and that no alternative means (such as appointing an agent) were available to complete the transfer of ownership.
Four
Analysis of the Re-trial Path for Rights Protection:
From “Legal Research” to “Tactical Evidence Presentation”
Step 1: Reconstruct the litigation logic based on the “foundation of the right of claim.”
Original approach: Solely assert rights based on Article 28 of the Provisions on Review of Objections to Enforcement, and present evidence in support of the four requisite elements.
New Perspective: Article 28 (Formal Requirements) → Interpretation of Article 127 of the “Minutes of the National Court Conference on Civil and Commercial Trials” as requiring proof that “there exists a reasonable and objective reason for the failure to transfer ownership.”
Step 2: Systematically retrieve the "hidden basis"
Search keywords: “untransferred ownership reasonable grounds,” “minutes on execution objections,” “expansive interpretation of ‘not due to one’s own reasons’”
Required Documents: The “Minutes of the National Courts’ Conference on Civil and Commercial Trials” and its accompanying interpretations and guidelines for application; similar cases adjudicated by the Supreme People’s Court.
Step 3: A Combination of Evidence
A comprehensive analysis is conducted from multiple perspectives, including the substantive validity of the contract, the developer’s breach leading to the release of the mortgage, and the force majeure effect of the pandemic.
Five
Reflection: How to Avoid Missing Key Evidence
1. Insufficient understanding of the legal effect of “meeting minutes”
Many lawyers regard the “Minutes of the National Court Conference on Commercial Trials” as a “reference document,” failing to recognize that it may be used as a basis for judicial reasoning (Article 9 of the Supreme People’s Court’s Guiding Opinions on Unifying the Application of Law and Strengthening Case‑Law Retrieval).
2. Deficiencies in Legal Research Methods
Only retrieve “laws” and “judicial interpretations,” and exclude informal sources of law such as “minutes,” “reply letters,” and “guiding opinions.”
3. The analysis of the basis of the right of claim is one-sided.
The focus is on “whether execution can be excluded,” without delving into the scope of exemption arising from “why the transfer of title could not be completed.”
Two
Revelation
1. At the time of signing: Require the developer to provide a written commitment regarding the release of the mortgage, and specify the liability for breach in case of delay.
2. When asserting rights: Send letters on a regular basis to assert your rights (even if unsuccessful, this can serve as evidence that the failure was not due to your own fault);
3. During litigation: Retain an attorney experienced in enforcement objection lawsuits and explicitly request that they conduct searches for relevant briefing notes and analogous cases.
Two
Conclusion
Ms. Guo’s case serves as a cautionary tale: in legal battles, victory often goes to those who understand the “rules of the game” best. In complex civil and commercial disputes, success in litigation depends not only on the facts themselves but also on one’s ability to uncover the “hidden key”—which may be a particular memorandum, an official reply, or even a seemingly minor judicial observation that is easily overlooked. The professional value of a lawyer lies in using systematic research techniques and a claims-based approach to open this door for the client.
Author
Introduction
Xu Xiulan
Senior Partner,
Business Area:Legal services for the cross-border e-commerce industry (including cross-border equity structures, cross-border intellectual property, and cross-border tax and financial compliance, etc.);Corporate Law Practice: Ongoing Legal Counsel, Equity Incentives, Dispute Resolution, etc.;Investment, financing, mergers and acquisitions, and private equity legal matters.
Attorney Xu Xiulan specializes in legal services for the cross-border e-commerce industry, corporate law practice, investment and financing, mergers and acquisitions, and private equity and corporate governance. She has represented investment firms or financing enterprises in hundreds of investment, financing, and M&A transactions across various stages and rounds, covering sectors such as real estate, TMT, biopharmaceuticals and healthcare, education and training, intelligent manufacturing, retail and consumer goods, food and beverage, and cross-border e-commerce.
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Zhiheng · Introduction