On March 7, 2012, Chongqing Longfor Chengheng Real Estate Development Co., Ltd. (“Longfor Chengheng”) and Chongqing General Trading New Century Daping Shangdu (“New Century”) signed the Leasing Contract whereby Longfor Chengheng would lease out its house located at LG-L4, Block A2, Longfor Paradise Walk Phase I, No.174, Changjiang 2nd Road, Yuzhong District, Chongqing to New Century for operation. After this contract was signed, the two parties disputed the understanding of guaranteed rent and commission rent in the case of a department store or supermarket. Longfor Chengheng filed a lawsuit to Chongqing Yuzhong District Court, claiming that New Century should pay the defaulted rent which equals to the guaranteed rent and the commission rent in the case of a department store or supermarket, whichever is higher.
As the attorney-at-law of Longfor Chengheng, ZHH lost in the first instance of this case. Chongqing No.5 Intermediate People's Court accepted Longfor Chengheng's request for appeal and amended the judgment made by Chongqing Yuzhong District Court. The court of second instance held that, with reference to the disputed clauses, pursuant to the Contract Law, first, they should be interpreted based on terms used in the contract; second, they should be interpreted in conjunction with related clauses used in the contract; third, they should be interpreted in line with the contract purpose; finally, they should be interpreted as per trading practices and the principle of good faith. Therefore, the only favorable understanding could be obtained, and all of Longfor Chengheng's claims were supported by the court of second instance.
This case is one of the few cases of a large amount in Chongqing involving a lease contract dispute over the interpretation of contract terms. ZHH's team won the client's high recognition and positive evaluation based on its solid legal foundation, serious and responsible working attitude, high-quality legal services, first-class legal professionalism and competence.
This project was led by Partner CHEN Qing.