Abstract: The price difference calculation rule is a special rule for quantifying money compensation  established by Article 60 of the Judicial Interpretation of the  General Provisions of Contract Book of Civil Code (the Judicial Interpretation) on the basis of Article 584 of the Civil Code. The essence of the price difference calculation rule is  to determine the damages that should be compensated by the differences between the substitute transaction prices and the contract prices. Article 60 of the Judicial Interpretation defines the loss of price difference as  the loss of obtainable benefits from the perspective that the non-breaching party is a commercial subject, which limits the scope of application of the price difference calculation rule. When the non-defaulting  party is a consumer, price difference loss is not a loss of obtainable benefits. For the stability of the application of the rule, the termination of contract should be regarded as a prerequisite for the calculation  of price differences. The significant feature of the price difference calculation rule is that it internalizes  the non-defaulting party’s obligation to reduce losses as its core constituent element, thereby freeing the  compensation for price difference losses from the limitations of the loss reduction rule. Money compensation incurred by violation of a continuing fixed-term contract may also be subject to the price difference calculation  rule. Article 61 of the Judicial Interpretation can  be understood as an illustrative provision regarding the determination of a reasonable period for substitute transactions and compensation for losses incurred during that period. 

Key Words: Damages for Breach of Contract; Loss of Profit; Substitute Transaction; Rule of Mitigation; Continuous Fixed-Term Contract 

Author: Zhu Guangxin, Research fellow, CASS Institute of Law;

Source: 3 (2025) Journal of National Prosecutors College.