Contract Law

Author: Li Yongjun
Publisher:
Publish Date: 2005-03-01
Features: At the invitation of China Renmin University Press, I wrote this textbook on contract law. To be honest, in my opinion, writing a textbook is more challenging than writing a monograph. Although a textbook may not reflect the highest level of research, it must reflect the highest level of teaching quality. Therefore, in many countries, writing textbooks is a task that can only be undertaken by distinguished scholars. Although I have published monographs on contract law, considering this point, I still felt a bit uneasy. First, because of the aforementioned reasons, I feared that I might not be up to the task. Second, Chinese textbooks are simply too numerous, giving the impression that adding one more wouldn’t make a difference, nor would removing one. Moreover, in contemporary China, it seems that everyone can write textbooks, so textbooks are not as valuable as monographs. This thankless task is not a good one for me. However, the sincerity of the editors at China Renmin University Press made it difficult for me to refuse. Under these circumstances, I accepted this assignment. The greatest feature of this textbook is that it was written by a single author, unlike the traditional model of one chief editor and multiple authors, thus avoiding contradictions in content and viewpoints. After accepting the task, I carefully compiled it based on my years of teaching experience and my understanding of contract law, as well as the current teaching standards and requirements, with the hope of gaining recognition from my peers. Here, I would like to emphasize that this book was written by me as an ordinary teacher, not as a scholar. I have always believed that freedom of contract is the soul and lifeblood of contract law. The egalitarianism within freedom of contract, as famously stated by the British legal scholar Henry Maine, embodies the principles of natural law. However, the humanistic spirit reflected in freedom of contract is often overlooked, especially in China. The core of freedom of contract is that no one can be bound by obligations to which they have not consented. This demonstrates the ultimate concern of contract law for individuals, reflecting respect and protection for human dignity. Therefore, Maine’s famous argument that "from status to contract" has far exceeded the realm of contract law itself. The aforementioned value of freedom of contract is also essential for a market economy and free competition. A free-market economy is based on the idea that every individual in the market is pursuing the maximization of their own interests. Therefore, allowing them to act according to their own will naturally leads to greater wealth, and since social wealth is the sum of individual wealth, the growth of individual wealth is the growth of social wealth. Thus, it perfectly complements the laissez-faire economic policy and has played a significant role in the development of capitalism. It is no wonder that it is considered a principle of private law. Today, we are also in the tide of a market economy, and freedom of contract should undoubtedly be the soul and lifeblood of China’s contract law. Since contract law upholds the principle of freedom of contract, the inevitable conclusion is that if an obligation does not arise from the free will of the parties, it cannot impose legal binding force on them. The law must provide remedies for defects in consent. Therefore, contract laws (or civil codes) in various countries all stipulate systems to remedy distortions in the parties’ intentions caused by mistakes, coercion, fraud, and other factors. China’s contract law is no exception. The principle of freedom of contract reflects the ideas of natural law, and thus should also include the concepts of justice and fairness. In the view of classical contract theorists, a contract is inherently just because equal and free individuals, when entering into contracts for their own interests, cannot agree to be bound by contractual terms that are unfavorable to them. However, with the continuous development of the legal person system, natural persons have become the true slaves of creations they once created, with severe imbalances in their economic status, leading to the widespread emergence of standardized contracts filled with unfair terms. As a result, the formula "a contract is just" cannot be considered correct in most cases. Therefore, regulating unfair contractual terms has become an urgent task for contract law. As a result, many civil laws (or contract laws) in various countries include principles for regulating unfair terms, and the principle of good faith has become increasingly prominent in contract law. Many of the statutory obligations and liability provisions in China’s current contract law also stem from this. However, it should be particularly noted that the principle of freedom of contract is always accompanied by democratic systems, fault liability, and strict liability, and they are intertwined like shadows. Without a democratic system as its political foundation, true freedom of contract would be difficult to implement. This is because democratic systems and freedom of contract share a common starting point: respecting individual choice. Fault liability and strict liability are means to ensure that the rights of freedom of contract are not abused. The autonomy of private law is based on the fact that whether the outcome is beneficial or not, the autonomous party bears the responsibility. Therefore, private law autonomy has a solid foundation. As for fault liability, it is even more the boundary of autonomy: anyone who decides their own actions to pursue their own interests must exercise due care for the interests of others. Otherwise, they are at fault and must bear tort liability. Therefore, contract law and tort law have an inherent unity. Although a contract is the result of the agreement of the parties, once this "agreement" is formed, it becomes an alienated entity independent of the parties’ wills. Neither party has the right to change this product of their former will and must abide by it. Therefore, the French Civil Code stipulates that a contract legally formed has the force of law between the parties. If one party violates it, they will face legal sanctions. This is the issue of breach of contract and remedies. Unlike the common law system, the civil law system, in addition to general provisions of contract law, also provides special rules for many typical contracts that arise in daily economic life, such as sales contracts, lease contracts, and lending contracts. These types of contracts stipulate special rules beyond the general provisions, providing convenience for transaction parties and the application of contract law. The objective requirements of this textbook may have gone beyond the author’s capabilities. I hope all my peers and esteemed scholars will not hesitate to offer advice and work together to contribute a small part to the development of legal education in China.