Chinese Contract Law - Theory & Practice, Second Edition

Mo Zhang is a James E. Beasley Professor of Law at Temple University Beasley School of Law, USA, and a Specially Invited Professor of Law of Tsinghua University Law School, China. He earned an LL.B and LL.M degrees from China University Political Science and Law, an LL.M from the University of Michigan, and a SJD from the University of Pennsylvania. Professor Zhang has published numerous articles in both American and Chinese law journals, and is the author of Chinese Contract Law (Brill 2006) and Introduction to Chinese Torts Law (Tsinghua University Press, 2014).

• Preface to the Second EditionAcknowledgmentsIntroduction1 Mao’s “Plain Paper” Theory and Legal Nihilism in China2 Post-Mao Reconstruction of the Legal System3 Contract Law Legislation3.1 Enactment of the General Principles of Civil Law3.2 Adoption of the Unified Contract Law3.3 The 2017 General Provisions of Civil Law3.4 The 2019 Foreign Investment Law4 Judicial Interpretation and Guiding Cases5 The Ideology of “Governing the Country by Law”6 Unsolved Issue: Judicial Independence 1 Contract Law in the Chinese Tradition1 Concept of Contract1.1 Chinese Tradition1.2 Civil Law Influence1.3 Theories of Contract Law1.3.1 Economic Means Theory1.3.2 Civil Act Theory1.3.3 Agreement Theory1.3.4 Exchange Theory1.4 Definition of Contract2 Contract Classification2.1 Named and Unnamed Contracts2.2 Formal and Informal Contracts2.3 Consensual and Real Contracts2.4 Onerous and Gratuitous Contracts2.5 Unilateral and Bilateral Contracts3 Application of the Contract Law4 Contract and the Socialist Market Economy5 Contracts and the State Plan2 Freedom of Contract in China1 Conception of Freedom2 Right of Parties to a Contract3 Limitations on Party Autonomy3.1 Legal Compliance3.2 State Plan Mandate3.3 Administrative Supervision3.4 Government Approval and Other Special Requirements3 Enforceability of Contracts1 Obligatio and Contract Obligations2 Governing Principles of Contracts2.1 Equality and Voluntariness2.2 Fairness and Good Faith2.3 Legality and Public Interests2.4 Observance of Contract3 Pre-Contractual Liabilities4 Formation of Contracts1 Offer1.1 Offer and Invitation for Offer1.2 Legal Effect of Offers1.3 Termination of an Offer1.3.1 Withdrawal of Offer1.3.2 Revocation of Offer1.3.3 Void Offers2 Acceptance2.1 Requirements for Acceptance2.2 Withdrawal of Acceptance2.3 Late Acceptance2.4 Late Arrival of Acceptance2.5 Acceptance and Conclusion of Contract3 Conclusion and Effectiveness of Contracts4 Formality of Contracts5 Incorporation of the State Plan and Government Approval5 Terms of Contracts1 Terms Generally Included in a Contract2 Interpretation of a Contract2.1 Contract Interpretation Approaches2.2 Contract Interpretation Theories2.3 Contract Interpretation under the Contract Law3 Supplementary Agreement for Uncertain or Missing Terms4 Proof of the Terms of a Contract5 Standard Terms6 Disclaimers6 Contract Defenses—Validity Issues1 Issues at Stake2 Capacity of the Parties—Effect-to-be-Determined Contract2.1 Contract by a Person with Limited Capacity for Civil Conduct2.2 Contract by an Agent without Due Authorization2.3 Right to Request Ratification and to Rescind a Contract2.4 Contract by a Person with No-Right-to-Dispose3 Void Contracts3.1 Fraud or Duress3.1.1 Fraud3.1.1.1 Intent to Deceive3.1.1.2 Conduct of Deceit3.1.1.3 Reliance3.1.1.4 Mistaken Manifestation of the Consent of the Deceived3.1.2 Duress3.2 Malicious Collusion to Damage the Interests of the State, a Collective, or a Third Party3.3 Use of a Contract for Illegal Purpose3.4 Harm to the Social Public Interest3.5 Violation of Compulsory Provisions of Law or Regulations4 Voidable Contracts4.1 Exploitation of the Other Party’s Precarious Position4.2 Material Misunderstanding4.3 Obvious Unfairness5 Consequences of Void and Voidable Contracts5.1 Avoidance from the Very Beginning5.2 Partial Avoidance and the Remaining Part of the Contract5.3 Independence of a Dispute Settlement Clause5.4 Restitution and Compensation6 Conditions Affecting the Validity of Contacts7 Performance of Contracts1 Performance Principles1.1 Complete and Adequate Performance1.2 Good Faith Performance2 Determination of the Obligations to Be Performed3 Right of Defense to Non-Performance3.1 Fulfillment Plea3.2 Unrest Defense4 Protective Measures for Performance4.1 Right of Subrogation4.1.1 Conditions for Subrogation4.1.2 Action to Seek Subrogation4.1.3 Defenses of the Obligor’s Debtor4.1.4 Legal Effect of Subrogation4.2 Right of Cancellation5 Guarantee of Performance5.1 Suretyship5.2 Security Interest5.3 Money Deposit5.4 Lien6 Changes of Circumstances during Performance6.1 Changes Related to the Parties6.2 Rebus Sic Stantibus8 Modification of Contract and Assignment1 Modification2 Assignment2.1 Assignment of Contractual Rights2.1.1 Formality of Assignment2.1.2 Non-Assignable Rights2.1.3 Effect of Assignment2.1.4 Right of Defense in Assignment2.2 Delegation of Contractual Obligations2.2.1 Delegation as a Transfer of Debts in Whole or in Part2.2.2 Subordinate Duties2.2.3 Non-Delegable Duties2.2.4 Transfer of Obligor’s Defenses against Obligee3 Comprehensive Assignment9 Rescission and Termination of Contracts1 Rescission1.1 Rescission by Agreement1.2 Rescission by the Provisions of Law1.2.1 Force Majeure1.2.2 Breach of Contract1.2.2.1 Anticipatory Repudiation1.2.2.2 Unreasonable Delay in Performance1.2.2.3 Frustration of the Contract Purpose1.2.3 Other Reasons Provided by the Law1.3 Rescission Notice1.4 Legal Consequences of Rescission2 Termination2.1 Performance2.2 Offset2.3 Deposit2.4 Exemption2.5 Merger10 Breach of Contracts and Remedies1 Liability for Breach: a Chinese Concept2 Liability Imputation3 Breach3.1 Anticipatory Repudiation3.2 Actual Breach4 Remedies4.1 Continuing Performance4.1.1 Monetary Obligation4.1.2 Non-Monetary Obligation4.1.2.1 Impossibility Rule4.1.2.2 Impracticability Rule4.1.2.3 Rule of Timing4.2 Remedial Measures4.3 Damages4.3.1 Compensatory Damages4.3.2 Liquidated Damages4.3.3 Punitive Damages4.3.4 Earnest Money5 Mitigation Duty6 Exemption of Liability11 Third Party Interests1 Third Party Receiving Performance2 Third Party Performing the Contract3 Breach Caused by a Third Party4 Bona Fide Third Party12 International Contracts1 Foreign Elements2 Choice of Law in International Contracts2.1 Choice of Law by the Parties2.2 Application of Law Absent the Parties’ Choice2.3 Application of International Law3 Choice of Forum in International Contracts4 Dispute Settlement Mechanism4.1 Reconciliation4.2 Mediation4.3 Arbitration4.4 Litigation5 Statute of Limitations13 Labor Contracts1 Labor Contract Legislation and Legal Framework2 Concept of Labor Contract2.1 Definition2.2 Categories3 Formation3.1 Requirements3.2 Probationary Period3.3 Collective Contract3.4 Labor Dispatch4 Validity and Enforceability5 Performance and Modificatiom5.1 Performance5.2 Modification6 Rescission and Termination6.1 Rescission6.2 Termination7 Legal Liabilities8 Dispute Settlement9 Government Supervision and ReviewIndex