Court Orders Repayment of CNY 65,655 in Private Lending Dispute

A court in Eastern China City has ordered a borrower to repay a loan of 65,655 yuan after he failed to appear at trial or provide any defense. The ruling underscores the enforceability of written loan agreements in Chinese civil litigation even when the defendant does not participate in the proceedings.

The dispute arose between Mr. Li, the plaintiff, and Mr. Wang, the defendant. According to the plaintiff’s claim, Mr. Wang borrowed 65,655 yuan from Mr. Li on November 30, 2010, due to a need for working capital. Mr. Wang issued a handwritten IOU to Mr. Li on the same day and promised to repay the amount immediately. Despite repeated demands, Mr. Wang never returned the money. Mr. Li then filed a lawsuit seeking repayment of the principal amount plus court costs.

At the court hearing, Mr. Li appeared through his authorized legal representatives. The defendant, Mr. Wang, was properly served with a summons but did not attend the hearing without any valid reason. The court proceeded with the trial in his absence. The key evidence presented was the original IOU document signed by Mr. Wang, which recorded the loan amount of 65,655 yuan. Mr. Li also gave oral testimony confirming the loan and the lack of repayment.

The court found that a lawful private lending relationship existed between the parties. Mr. Li had fulfilled his obligation to lend the money, while Mr. Wang had failed to repay. The court held that Mr. Wang thereby breached the contract and must bear the resulting liability. Because Mr. Wang chose not to appear, the court treated this as a waiver of his right to defend himself, and any adverse consequences fell on him.

Under the Contract Law of the People’s Republic of China, a lawfully formed contract is binding on both parties. The court cited Articles 8, 107, and 206, which require performance of contractual duties and impose liability for non‑performance. The Civil Procedure Law also allows a default judgment when a defendant is properly summoned but fails to appear. The court therefore ruled that Mr. Wang must repay the full loan amount within ten days after the judgment takes effect.

The judgment also provides for an additional consequence if Mr. Wang delays payment: he must pay double the interest on the overdue amount for the period of delay, as specified in the Civil Procedure Law. Mr. Wang is also ordered to bear the case acceptance fee of 1,441 yuan. This case illustrates that Chinese courts will enforce written loan agreements even against absent defendants, as long as the plaintiff presents clear documentary evidence. Borrowers should be aware that ignoring a lawsuit does not eliminate their legal obligations.

Disclaimer: This article is for informational purposes only and does not constitute legal advice.