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2023-08-07

Good Case Selection - Cash Exchange Does Not Equal Cash

Jin Yingbo

The plaintiff in the case of Zhejiang Guoshang Industrial Co., Ltd. v. Jiangsu Dongyangzhihua Cosmetics Co., Ltd. in dispute over a sales contract is not satisfied with the judgment of the first instance court and intends to file an appeal. Upon the introduction of the major shareholder of the company, Taizhou State owned Assets Management Co., Ltd., I am requested to file an appeal as its agent and participate in the agency work of the second instance. After thorough analysis and research of the basic situation and relevant materials of the case, I have proposed a different perspective from the first instance lawyer on agency. The second instance court in this case adopted the opinions of the agent in handling the disputed major client policy between the two parties, and revised the judgment of the first instance, effectively safeguarding the rights and interests of the parties.

Case introduction 

The plaintiff and the defendant entered into an agreement on April 1, 2001, for the distribution of the defendant's "Dongyang Flower" series products by the plaintiff. The agreement mainly stipulated the terms and conditions of the agreement, including the period and region, basic tasks, total rebate, speed rebate, and initial quota. After the agreement was signed, both the plaintiff and defendant fulfilled their obligations as agreed. On August 3, 2001, during the term of the agreement, the defendant issued the "National Key Customer Policy for the Autumn of 2001" to distributors nationwide, stipulating that if a one-time payment of 500000 yuan (in cash) is made to a designated account of the company before August 10, a rebate of 3% will be given, a rebate of 5% will be given if the payment exceeds 1 million yuan, and a rebate of 7% will be given if the payment exceeds 1.5 million yuan; Make a one-time payment of 500000 yuan (in cash) to the designated account of the company before August 31st, with a rebate of 2%. If the payment exceeds 1 million yuan, a rebate of 3% will be refunded, and if the payment exceeds 1.5 million yuan, a rebate of 5% will be refunded. After receiving the company's documents, the plaintiff paid 1.5 million yuan in two installments, including the first installment of 700000 yuan in cash and the second installment of 800000 yuan in bank acceptance on August 16th.

After the expiration of the cooperation period between the plaintiff and the defendant, the defendant issued a business contact letter to the plaintiff, which explained the relevant contents of the cooperation between the two parties, including total shipment, total payment, rebates for the plaintiff's 1.5 million yuan large account policy, total and speed rebates, and other matters. Due to the negligence and mistake of the original legal advisor of the plaintiff company, they refused to object to the business contact letter that should have been recognized, leading to the occurrence of a dispute between the plaintiff and the defendant. Although the plaintiff's legal representative made efforts to negotiate and save the return part, the defendant no longer granted the relevant preferential policies given to the plaintiff by the plaintiff, resulting in the plaintiff having to appeal to the court for resolution.

The handling opinion of the first instance court

The court of first instance held that, according to the defendant's policy of large clients, a one-time cash exchange rebate of 500000 yuan was 3% before August 10, 2001, and a rebate of 7% when the amount reached 1.5 million yuan. On August 10, 2001, the plaintiff made a bank remittance of 700000 yuan and paid 800000 yuan using a bank acceptance bill. According to the "Payment and Settlement Measures" issued by the People's Bank of China, the use of bills and exchange is a different payment and settlement method. Therefore, the plaintiff's request for a 7% rebate of 1.5 million yuan for payment cannot be established. The plaintiff only enjoyed a 3% rebate of 700000 yuan, which is 21000 yuan.

Second instance lawyer's proxy opinion

Based on the evidence of this case and the understanding of cash exchange and the format of the documents issued by the defendant regarding the policy of major clients, the agent proposed the following views:

1. The notice of major customer policy is the defendant's intention to sign a contract with all its distributors nationwide, which is an offer in nature. Once accepted by the other party, it constitutes an acceptance, and the contract is established. Therefore, after the plaintiff exercises the actions specified in the notice, the defendant shall fulfill the obligation to pay preferential policies in accordance with the provisions of the notice. Although the plaintiff expressed objections to the business contact letter in this case, the major client policy is an independent contract that should be binding on both parties, and both parties should abide by and implement it.

2. At the same time, due to the fact that the major customer policy was drafted by the defendant in advance and was not negotiated with the other party, it belongs to the format contract stipulated in the Contract Law. In the event of a disagreement between the parties regarding the terms of the contract, it should be interpreted according to their usual understanding; In cases where there are two or more interpretations, an interpretation unfavorable to the party providing the format contract should be made. There is a clear difference in the understanding of cash exchange between the parties in this case. The defendant believes that both are cash, while the plaintiff believes that cash exchange is not cash, and the acceptance bill provided by the plaintiff is also one of the cash exchanges; At the same time, the defendant's standard contract only clearly stated the requirement for spot exchange for 500000 yuan, and did not specify the requirements for 1 million yuan and 1.5 million yuan. Therefore, a favorable understanding should be made for the plaintiff regarding whether cash exchange is applicable for 1 million and 1.5 million yuan.

3. Although the business contact letter was not binding due to the plaintiff's objection, it cannot be denied that it is a comprehensive summary of the relevant facts during the cooperation process between the two parties and is one of the evidence in this case. The business contact letter acknowledges the plaintiff's remittance of 1.5 million yuan and promises to provide preferential policies. Therefore, based on the evidence, it should also be determined that the plaintiff paid 1.5 million yuan within the specified time.

In summary, the plaintiff should enjoy a rebate of 1.5 million yuan and 75000 yuan.

Judgment of the second instance court

The second instance judgment held that due to the inclusion of the payment method in the policy of major clients as "spot exchange", the allegation is unclear, as "spot exchange" is a professional term used in the international financial field. In the case of unclear agreement, the defendant claimed that the payment for executing the major customer policy must be in cash without sufficient reasons. The calculation of the major customer policy rebate in the business contact letter sent by the defendant to the plaintiff was also based on receiving 1.5 million yuan from the plaintiff. It can be seen that the defendant has admitted to receiving the 1.5 million yuan payment within the specified period, so a rebate of 75000 yuan should be given to the plaintiff; At the same time, it should be corrected that the total rebate and the speed rebate were undercalculated. Therefore, a revised judgment was made to support the plaintiff's claim.


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