Court Orders Payment of CNY 4,204 in Timber Sale Dispute
A court in Eastern China City has ruled on a dispute over unpaid timber purchases, ordering one of two defendants to pay the outstanding debt of CNY 4,204. The case involved a seller who claimed that two men jointly bought timber but failed to pay the full amount. After hearing evidence and testimony, the court determined that only one defendant was liable for the remaining balance, dismissing the claim against the other.
The plaintiff, Mr. Zhang, operated a timber retail store and sued two defendants, Mr. Zhao and Mr. Wu, for non-payment. According to Mr. Zhang, on November 16, 2010, both defendants came to his store and purchased timber valued at a total of CNY 6,897. Mr. Zhao wrote an IOU for that amount. After repeated demands for payment failed, Mr. Zhang filed the lawsuit. Mr. Zhao claimed he had only taken about CNY 2,000 worth of timber that day and that the IOU was written after a phone call with Mr. Wu, who had an unsettled account with Mr. Zhang. Mr. Wu admitted that the timber was for his use and said he had asked Mr. Zhao to handle the purchase. Mr. Wu stated that he alone should bear the debt.
During the court hearing, evidence was presented, including the IOU dated November 16, 2010, signed by Mr. Zhao. The court also reviewed the trial transcript. Mr. Wu testified that he had repaid CNY 2,693 of the debt by supplying wood materials but had not calculated the exact remaining amount. However, he provided no documentary proof of that repayment. The plaintiff later adjusted his claim, seeking only CNY 4,204 as the unpaid balance after deducting the wood offset. Both defendants appeared in court and gave their respective accounts.
The court found that the debt arose from a sale of timber on credit. Mr. Zhao had acted on behalf of Mr. Wu in purchasing the wood. After settlement on November 16, 2010, Mr. Zhao issued an IOU for CNY 6,897. Later, Mr. Wu repaid CNY 2,693 in kind, leaving CNY 4,204 outstanding. The court held that Mr. Wu was liable for this amount because he admitted that the timber was for his own use and that he had authorized Mr. Zhao to handle the transaction. The court rejected the claim against Mr. Zhao, as the debt was incurred for Mr. Wu’s benefit and Mr. Wu accepted responsibility.
The legal basis for the decision rested on the Contract Law of the People’s Republic of China. Article 109 provides that if a party fails to pay the price or remuneration, the other party may demand payment. Article 161 requires the buyer to pay the price at the agreed time or, if no time is agreed, at the time of receiving the goods. The court applied these provisions to the facts, concluding that Mr. Wu, as the actual buyer, had a duty to pay the remaining CNY 4,204. The court also noted that Mr. Wu failed to provide evidence of any further offset, and thus his bare assertion was not sufficient to reduce the debt further.
This case illustrates how courts in China allocate liability when one person acts as an agent for another in a commercial transaction. The key factor was the admission by Mr. Wu that he was the true buyer and that Mr. Zhao only assisted him. The court ordered Mr. Wu to pay the CNY 4,204 within three days of the judgment, plus interest for delayed payment. The lawsuit cost of CNY 50 was reduced to CNY 25, with Mr. Zhang bearing CNY 10 and Mr. Wu bearing CNY 15. The ruling confirms that an agent may be discharged from personal liability if the principal acknowledges the debt. Parties in similar situations should ensure clear documentation of agency arrangements and repayment offsets.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.