Court Orders Payment of CNY 121,506 in Beverage Supply Dispute
A court in Eastern China City has ruled in favor of a beverage supplier in a contract dispute with a seafood restaurant owner and a guarantor. The supplier sought payment for unpaid deliveries made on credit, along with interest and legal costs. The court found the debt valid and ordered the restaurant owner to pay the outstanding amount, while the guarantor was held partially liable for a portion of the debt and associated fees.
The plaintiff, Eastern China City Trading Company, supplied beverages to a seafood restaurant operated by the defendant, Mr. Chen, in Eastern China City. The parties agreed that the supplier would deliver goods on a credit basis, with monthly invoices settled by the end of the following month. The supplier delivered beverages from early 2011, and the parties conducted account reconciliations on four dates in August, September, October, and November 2011. These statements showed total unpaid invoices of CNY 159,852. After deducting returns valued at CNY 31,260, meal expenses of CNY 4,983, tax invoices of CNY 1,159, and empty container refunds of CNY 944, the remaining debt was CNY 121,506. The guarantor, Mr. Yu, signed a letter of commitment on June 7, 2011, undertaking to guarantee all beverage payments incurred during the cooperation period from June 5, 2011 to June 4, 2012.
During the court hearing, the plaintiff presented several pieces of evidence: business registration documents, four account statements signed by the restaurant, the guarantee letter from Mr. Yu, and an invoice for lawyer fees of CNY 5,000. The guarantor, Mr. Yu, attended the hearing and acknowledged providing the guarantee, but argued that his obligation covered only amounts arising after June 5, 2011, not earlier debts. The plaintiff and Mr. Yu agreed that CNY 10,000 of the total debt was incurred before June 5, 2011. The restaurant owner, Mr. Chen, did not appear in court despite being properly summoned, and he submitted no defense or evidence.
The court found that the debt was clearly established by the account statements and the guarantee letter. The evidence showed that Mr. Chen, as the restaurant owner, owed the plaintiff CNY 121,506 for delivered beverages, plus interest and lawyer fees. The court also held that Mr. Yu’s guarantee was valid and limited to the period stated in his letter. Accordingly, the court ordered Mr. Chen to pay the full CNY 121,506, interest calculated at the People’s Bank of China benchmark loan rate from December 16, 2011 until the date of judgment, and the lawyer fee of CNY 5,000. Mr. Yu was ordered to be jointly and severally liable for CNY 111,506 of the principal (the portion incurred within the guarantee period), along with interest and the lawyer fee. The court rejected the plaintiff’s claim for the remaining portion.
The court applied principles of contract law and guarantee law. It stated that debts must be repaid, and the supplier’s claim was supported by clear documentary evidence. The guarantor’s liability was confined to the scope of his written commitment, which expressly covered only amounts arising during the specified period. The court also noted that Mr. Yu, after fulfilling his guarantee obligations, had the right to seek reimbursement from Mr. Chen. The decision emphasized that a guarantor cannot be held liable for debts outside the agreed term. The case also highlighted that a defendant who fails to appear without justification may face a default judgment.
This case illustrates the importance of maintaining accurate account statements and clearly defining guarantee terms in commercial supply contracts. Businesses in Eastern China City should ensure that credit arrangements are documented in writing, with periodic reconciliations to avoid disputes. The ruling reinforces that guarantors are bound only by the specific scope of their commitment, and that debtors who ignore court proceedings risk an adverse judgment. The decision provides practical guidance for beverage suppliers and other creditors in similar situations.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.