Partnership Guide | Author: Li Li
This is the 919th text of Li Li's blog and partnership guide public account
Concealing the fact that the DSR value of the online store did not meet the standard, the court ruled to terminate the equity and online store transfer agreement
Although the subject matter of the transfer is relatively special and belongs to the content of the Company Law of the People's Republic of China, in the absence of special provisions in the Company Law, the equity transfer contract still needs to follow the norms of the Contract Law. For example, in the case mentioned in the title of this article, the focus of the dispute is mainly on the determination of facts in terms of contract law.
Specific online stores, websites, self-media, etc., have increasingly become the "operating assets" of many companies, and even the core assets of many companies are these. When these companies transfer control of the company due to equity transfer, etc., the actual purpose of the party receiving the equity transfer is actually to obtain these core "operating assets". Therefore, in the design and performance of such equity transfer contracts, special attention should be paid to the quality assurance and handover agreements of these "operating assets", and we must not still use a very simple equity transfer contract text to operate this matter, otherwise we will suffer losses.
In the case mentioned today, as an equity transferee and a website transferee, there are relatively good practices in the operation process of equity transfer, but there are also obvious omissions, and the experience and lessons in it have certain reference value.
The plaintiff in the first instance of this case: Ma Mou, the transferee of the equity transfer
Defendant in the first instance of this case: Wang Mou, the transferor of the equity transfer
The subject of the transfer: the equity of Company A and a Tmall flagship store associated with Company A.
On March 6, 2017, plaintiff Ma (transferee, Party B) and defendant Wang (transferor, Party A) and defendant A (intermediary, Party C) signed a Copy of the Company Equity and Mall Transfer Agreement, stipulating that Party A held 100% of the equity of Company A was transferred to Party B for 255,000 yuan, and the fee included the company's associated abc flagship store (Note: The name of the store is a pseudonym as used in this article, not the real name). This includes a mall technical service fee of $60,000, a consumer protection fee of $50,000, and a mall transfer fee of $145,000. The main contents of the agreement are as follows:
Paragraph 2 of Article 1 of the Agreement stipulates that Party B shall pay Party C a one-time payment of the above equity transfer payment and service commission to Party C within the date of signing this Agreement, and Party C shall pay Party A on its behalf in accordance with the provisions of Paragraph 3 of this Article; paragraph 3 stipulates that after Party B pays the full transfer payment and full service commission to Party C, Party C shall pay Party A RMB 144,300 (60%) within 3 working days from the date of approval of the "Application Materials for Registration of Equity Change" submitted by Party A and Party B to the administration for industry and commerce, and Party A agrees, Party C has the right to directly deduct the commission payable by Party A to Party C when paying the first transfer payment mentioned above. Party C shall also pay the remaining RMB96,200 (40%) within 3 working days after Party B obtains the new business license and Party A cooperates in completing the procedures for changing the bank account opening permit. Paragraph 1 of Article 4 of the Agreement stipulates that Party A shall pay Party C a service commission of RMB 14,500 in accordance with paragraph 3 of Article 1 of this Agreement, and Party B shall pay a service commission of RMB 14,500 to Party C in accordance with the provisions of Paragraph 2 of Article 1 of this Agreement. Paragraph 1 of Article 5 of the Agreement stipulates that the three parties unanimously confirm that the purpose of the contract for Party B to purchase equity from Party A is mainly to obtain the operating control of the online store under the name of the joint venture company. If Party B's purpose of the contract cannot be realized due to Party A's reasons (including but not limited to being punished by the platform where the online store is located due to the pre-transfer business behavior, which has a significant impact on the value of the online store, and the trademark defect has a significant impact on the subsequent operation of the online store), Party B has the right to unilaterally terminate the contract and hold Party A responsible for the corresponding breach of contract. Paragraph 2 of Article 6 of the Agreement stipulates that if Party A is unable to register the change as scheduled, or seriously affects Party B's realization of the purpose of concluding this Agreement, Party A shall pay Party B liquidated damages according to 30% of the equity transfer payment already paid by Party B. If Party A's breach of contract causes losses to Party B, or seriously affects Party A's realization of the purpose of entering into this Agreement, Party A must compensate Party A according to the actual losses; paragraph 3 stipulates that if Party B's reasons cause Party A to be unable to register the change as scheduled, or seriously affect Party A's realization of the purpose of entering into this Agreement, Party B shall pay Party A a liquidated damages according to 30% of the equity transfer payment already collected by Party A. If Party B causes losses to Party A due to Party B's breach of contract, and the amount of liquidated damages paid by Party B is lower than the actual loss, Party B must compensate according to the actual losses.
After the signing of the above agreement, Ma instructed the third party to pay a total of 269,500 yuan to Party C
Tmall company used the DSR data from October 1, 2016 to September 20, 2017 as the assessment cycle to conduct the first phase of the 2018 renewal assessment. ABC's flagship store "DSR Service Attitude" was not up to standard on December 11, 2016, and "DSR Description Match" was not met on December 7, 2016.
The so-called "dsr" refers to the dynamic rating of the store, which is dynamically changed and updated in real time. The dsr score is calculated according to the three scores of the store baby description match, the store service attitude, and the logistics service. Each store rating is based on the sum of the rating given by the buyer in 6 consecutive months / the number of times the buyer gave the rating in 6 consecutive months.
When the store order transaction is successful, Taobao buyers can score the store from three items: the description of the baby, the service attitude of the store, and the logistics service.
Ma found that because the flagship store did not meet the standards, it was impossible to renew the 2018 Tmall mall contract with Tmall. As a result, Ma filed a lawsuit with the court, requesting that the agreement be terminated.
Plaintiff Ma's litigation claims include: 1. Ordering the "Company Equity and Mall Transfer Agreement" signed between the plaintiff and defendant Wang to be terminated on the date of the lawsuit; 2. Requesting defendant Wang to return rmb255,000 of the plaintiff's equity transfer payment and compensate the plaintiff for various losses such as promotion fees, product inventory, rent, and lawyers' fees of RMB479,130, totaling RMB734,130; 3. Requesting defendant Company C to return the plaintiff's intermediary service fee of RMB14,500 4. Request defendant Company A to bear joint and several liability for the above-mentioned debts of defendant Wang; 5. Request the third party Zhejiang Tmall Network Co., Ltd. to bear joint and several liquidation liabilities for the above-mentioned debts of defendant Wang.
The plaintiff argued that defendant Wang and defendant A deliberately concealed the fact that Company A's dsr business indicators (logistics services, service attitudes, and descriptions matched) on the Tmall platform from December 2016 to February 2017 were unqualified, and that the third party, Tmall Company, did not timely disclose the credit evaluation information of defendant Wang's unqualified dsr business indicators between October 2016 and February 2017 on the Tmall platform. Therefore, the plaintiff signed the "Company Equity and Mall Transfer Agreement", and after Company A changed its name, it was unable to renew the 2018 Tmall Mall Contract with the third party, Tmall Company, resulting in the failure to achieve the purpose of the contract between the plaintiff and the defendant, and the plaintiff thus incurred various losses such as publicity and promotion, product inventory, and rights protection.
The plaintiff's claim was dismissed at first instance. The court of first instance held that:
...... We consider the following factors: First, judging from the consultation and communication between the parties in the process of the equity transfer of Company A, the plaintiff failed to provide evidence to prove that the defendant deliberately concealed the relevant circumstances of the abc flagship store, and the understanding and notification of the operating conditions of the stores involved in the case, especially the verification of the assessment and renewal of the stores involved in the case, could not be objectively reflected and verified. Judging from the position in the process of equity transfer, the defendant Wang Made the Transferor, in the absence of special requirements from the transferee, to ensure that the transfer of the store involved in the case was legal and valid at the time and met the same purpose, should be regarded as having fulfilled its contractual obligations; on the contrary, the plaintiff, as the transferee, should have a higher duty of care and put forward clear and specific requirements in the course of the transaction if it has special requirements for authorizing renewal and other matters, but the plaintiff failed to provide evidence to prove that it made a reasonable request for knowledge. or the defendant explicitly rejects his request for information. Second, from the perspective of equity transfer and actual performance, the plaintiff has paid the company's equity transfer payment to the intermediary party A company in accordance with the contract, and the original and the defendant have indeed completed the registration procedures for the change of equity transfer of company A, the defendant Wang has actually delivered company A and the corresponding online store abc flagship store to the plaintiff, the plaintiff has actually controlled the store involved and operated smoothly, and the transaction between the two parties was indeed in a businessable state at that time. During the period of operation of the plaintiff, the plaintiff also went through the formalities of registering the change of enterprise name, and changed the name of company A to Suzhou Ximontike E-commerce Co., Ltd. Therefore, the plaintiff's business needs and cognition should not be used to judge the purpose of the contract at the time of the transaction between the plaintiff and the defendant, and the plaintiff's request for rescission of the transfer agreement on this ground lacks factual and legal basis, and this court does not support it. ......
The plaintiff at first instance appealed against the first-instance judgment.
The second instance upheld the main litigation claims of the plaintiffs in the first instance and changed the judgment of the case.
As to whether Ma had the right to terminate the agreement, the court of second instance held that:
The Court held that the transfer agreement signed between the appellant and Wang stated that Wang had transferred 100% of the equity of Company A held by Him to the Appellant, and the transfer price included the "abc flagship store" mall (i.e. Tmall platform online store) associated with Company A, and the purpose of the appellant's contract for the purchase of equity was mainly to obtain the operating control of the target online store. That is to say, the appellant's transfer of the equity of company a is mainly to operate the "abc flagship store" on the Tmall platform, that is, the target online store, and Wang, as the transferor of the equity and the target online store, should disclose to the appellant the true operating conditions of the a company and the target online store, and ensure that the appellant can operate the target online store normally after being transferred. But in fact, the "DSR service attitude" and "DSR description consistent" of the "abc flagship store" on the Tmall platform did not meet the standards in December 2016. The result of this non-compliance means that the average dsr of the target online store between June and December 2016 is less than 4.6, which causes the target online store to be unable to renew its contract with the Tmall platform in 2017 and completely withdraw from the Tmall platform in March 2018, so that the appellant's purpose of operating the target online store on the Tmall platform is objectively unattainable. Since the transfer agreement between the two parties was signed in March 2017, at this time, the situation that the DSR value of the online store did not meet the standard already existed, and Wang, as the equity transferor and the online store operator, should have been aware of the fact that the DSR value of the online store was not up to standard and its consequences, but concealed it from the appellant. The appellant's request for rescission of the contract in accordance with the provisions of Article 5, Paragraph 1 of the Assignment Agreement is in accordance with the agreement and the provisions of the law, and should be supported. The first-instance judgment did not support the appellant's request for rescission of the contract, and the application of the law was improper, and this court corrected it. Regarding the date of rescission, since the appellant did not notify the termination of the contract in writing before the lawsuit was filed, this court took February 8, 2018, the expiration date of the first instance court's announcement to Wang that a copy of the complaint was served, as the date of rescission of the contract.
In the above example, when Ma first designed the content of the transfer contract, he clearly stated the contract purpose of the transfer contract in the agreement, which is a very good practice, to avoid disputes in understanding the interpretation of the "purpose of the contract", and also to avoid the uncertainty that may arise on this issue during litigation. This is a lesson worth learning.
However, in terms of the content design of the contract, there are still obvious defects, that is, the quality assurance of the "subject" of the transfer is not clearly agreed upon, which is also one of the objective reasons for the rejection of the plaintiff's litigation claim in the first-instance judgment.
In addition, although the first-instance judgment is not as reasonable as the second-instance judgment as a whole, the judge's opinion in the first-instance judgment is still valuable, for example, the first-instance judgment holds that:
As a transferee, if it has special requirements for matters such as authorizing renewal, it should have a higher duty of care and make clear and specific requirements in the course of the transaction...
There is some truth to this statement. At present, the people's courts have certain general requirements for the duty of care of commercial entities in commercial activities. From the perspective of learning lessons, in commercial contracts, each party should try to reflect its own meaning and requirements in the agreement as completely and accurately as possible in order to avoid such risks to the greatest extent.