Brick Supplier Wins Payment Dispute for RMB 5,760 in Eastern China Contract Case

Brick Supplier Wins Payment Dispute for RMB 5,760 in Eastern China Contract Case

CASE OVERVIEW

A civil court in Eastern China has ruled in favor of a brick supplier in a contract dispute, ordering a buyer to pay RMB 5,760 in overdue payment plus RMB 702 in interest for delayed payment. The judgment was delivered on January 14, 2011, after the defendant failed to appear at trial.

CASE BACKGROUND AND FACTS

The plaintiff, Mr. Tu, operated a red brick supply business. In 2008, the defendant, Mr. Dai, approached Mr. Tu to purchase red bricks for a construction project located in the city’s urban area. The bricks were needed for work on a property referred to as the “Mao” project. Mr. Tu agreed to supply the bricks and delivered them directly to the construction site designated by Mr. Dai. The parties agreed that payment would be made upon delivery of the goods.

Despite receiving the bricks, Mr. Dai did not make any payment. Mr. Tu made repeated requests for payment, but Mr. Dai offered various excuses and continued to delay payment. The total outstanding amount for the bricks was RMB 5,760.

Mr. Tu filed a lawsuit seeking payment of the principal amount, compensation for losses caused by the delayed payment calculated at a daily rate of 0.021 percent over 730 days, and court costs. During the trial, Mr. Tu amended his claim for losses to RMB 702, calculated based on the bank loan interest rate of 5.4 percent per annum for the period from October 13, 2008, to January 14, 2011, totaling 824 days.

COURT PROCEEDINGS AND EVIDENCE

The case was filed on October 11, 2010. The court formed a collegiate panel consisting of a presiding judge, an acting judge, and a people’s juror. A public hearing was held on January 14, 2011. Mr. Tu appeared in court. Mr. Dai was served with a summons but did not appear without justification and did not submit any defense.

To support his claim, Mr. Tu submitted a material requisition slip signed by Mr. Dai. This slip confirmed that Mr. Dai had received red bricks on behalf of the “Mao” project site and acknowledged the outstanding balance of RMB 5,760. Since Mr. Dai did not appear to challenge this evidence, the court considered that he had waived his right to object. The court reviewed the document and found it to be legally valid and admissible.

Mr. Dai did not provide any evidence to dispute the claim.

COURT FINDINGS AND JUDGMENT

The court found that Mr. Tu delivered 16,000 units of 9.5 red bricks to Mr. Dai between October 11 and October 12, 2008. The total price was RMB 5,760. Mr. Dai signed the material requisition slip to confirm receipt. The court determined that a valid sales contract existed between the parties and that Mr. Dai had failed to pay the agreed amount.

Although the parties did not specify a payment date in their agreement, the court noted that under the law, payment is due at the time the buyer receives the goods. Since Mr. Dai did not pay, he was liable for the principal amount and for the losses caused by the delay. The court approved Mr. Tu’s amended claim for interest calculated at the bank loan rate.

The court ruled that Mr. Dai must pay Mr. Tu RMB 5,760 for the bricks and RMB 702 for interest, totaling RMB 6,462. Payment must be made within ten days after the judgment takes effect. If Mr. Dai fails to pay on time, he must pay double the interest on the overdue amount for the period of delay. Mr. Dai was also ordered to pay the court costs of RMB 50, which Mr. Tu had already paid.

KEY LEGAL PRINCIPLES

The court applied several legal principles from the Contract Law of the People’s Republic of China. Under Article 159, a buyer must pay the agreed price for goods. Article 161 requires payment at the time of delivery if no other time is agreed. Article 107 provides that a party who fails to perform a contractual obligation must bear liability for losses, including interest on overdue payments.

The court also relied on Article 130 of the Civil Procedure Law, which allows a court to proceed with a trial and issue a judgment when a defendant who has been properly served fails to appear without a valid reason.

PRACTICAL INSIGHTS

This case illustrates the importance of obtaining written acknowledgment of delivery and outstanding balances in commercial transactions. The signed material requisition slip served as critical evidence for the plaintiff. The case also shows that even when no specific payment date is written into a contract, the law implies that payment is due upon receipt of goods. Sellers should document all deliveries and keep records of signatures from buyers. The ruling also confirms that courts will award interest on overdue payments from the date of delivery, not from the date of a formal demand.

LEGAL REFERENCES

Contract Law of the People’s Republic of China, Articles 107, 159, 161. Civil Procedure Law of the People’s Republic of China, Articles 130, 229.

DISCLAIMER

This article is for informational purposes only and does not constitute legal advice. Readers should consult a qualified legal professional for advice on specific cases.