A certain advertising company in Yiyang signed a project lighting installation and material production and installation contract with a certain real estate company in Qidong. It was agreed that Qidong real estate company would purchase decoration and decoration items from this advertising company in Yiyang, and the installation would be carried out by the advertising company in Yiyang. The specific equipment, quantity, price, etc. required were also agreed upon.

After the advertising company in Yiyang completed the installation of the goods on the bill of materials from December 8, 2019 to March 8, 2020 as required, the staff of a certain real estate company in Qidong signed the acceptance confirmation form on June 10, 2020, confirming that the goods and installation have been accepted and qualified. However, as of the date of filing this lawsuit, the real estate company in Qidong has not paid the relevant amount as stipulated in the contract. The advertising company in Yiyang sued the defendant to pay a project fee of 147,000 yuan and a penalty of 79732.8 yuan for breach of contract. (Compiled by Tang Jiahua, a reporter from Hengyang News Network)

Court ruling: The defendant Qidong Real Estate Co., Ltd. was ordered to pay the plaintiff Yiyang Advertising Co., Ltd. a payment of 147,000 yuan, and a penalty of 14.8% per year was calculated from June 23, 2020, based on 147,000 yuan, until the payment is fully made.

The judge stated that in this case, although the contract involved in the case stipulates that the plaintiff shall first issue a corresponding invoice during the payment process of the project funds, and then the defendant shall pay the project funds to the plaintiff. The obligation to issue an invoice is only an incidental obligation and cannot constitute consideration with the obligation to pay the project funds. Therefore, the defendant cannot claim to exercise the right of first performance defense and refuse to pay the contract price on the grounds that the plaintiff has not issued an invoice.

However, it should be noted that fulfilling the right of defense first is a deferred right of defense, which only temporarily prevents the exercise of the other party's right to request, and is not a permanent right of defense. If the other party fulfills its contractual obligations, the right of defense shall be extinguished first, and the parties shall fulfill their own obligations. If one party exercises the right of defense to perform first, resulting in delayed performance of the contract, that party shall not be liable for breach of contract, and the responsibility for delayed performance shall be borne by the other party. The exercise of the right of defense by the party to perform first shall not affect the pursuit of the breach of contract liability of the party who should perform first.