LOGO The Law Made by Yourself contract Law
• According to law, debts can be devided into two categories: legal obligation and contractual obligation. • Legal obligation may be caused by (无因管理)， unjust enrichment and infringment. • Today we’ll focus on the contractual boligation only.
• The bodies or subjects in a contract are equal. • Could a state organ be the subject in a contract? • eg. state-owned land use rights transfer contract • Is contract a Civil Juristic Act or factual behavior? • What matters here is the declaration of will/intention(意思表示)
Privity of Contract(合同相对性) • 1. • • • In most of the cases, the Doctrin of Privity should be observed, only if as followed: The Contract Law of P. R. China Article 73 Subrogation; Limitation Where the obligor delayed in exercising its creditor‘s right against a third person that was due, thereby harming the obligee, the obligee may petition the People‘s Court for subrogation, except where such creditor‘s right is exclusively personal to the obligor. The scope of subrogation is limited to the extent of the obligee’s right to performance. The necessary expenses for subrogation by the obligee shall be borne by the obligor.
• Article 74 Obligee‘s Right to Cancel Manifestly Unreasonable Act by Obligor • Where the obligor waived its creditor‘s right against a third person that was due or assigned its property without reward, thereby harming the obligee, the obligee may petition the People‘s Court for cancellation of the obligor‘s act. Where the obligor assigned its property at a low price which is manifestly unreasonable, thereby harming the obligee, and the assignee was aware of the situation, the obligee may also petition the People‘s Court for cancellation of the obligor‘s act. • The scope of cancellation right is limited to the extent of the obligee‘s right to performance. The necessary expenses for the obligee‘s exercise of its cancellation right shall be borne by the obligor.
• Article 229 Leasing Contract Not Affected by Change of Ownership (买卖不破租赁) • Any change of ownership to the lease item does not affect the validity of the leasing contract.
• Article 272 Contracting and Subcontracting in Construction Projects • The developer may enter into a contract for construction project with a prime contractor, or enter into contracts for survey, design, and construction with the surveyor, designer, and constructor respectively. The developer may not divide a construction project which should be completed by one contractor into several parts and contract them out to several contractors. • Subject to consent by the developer, the prime contractor or the contractor for survey, design, or construction may delegate part of the contracted work to a third person. The third person and the prime contractor or the contractor for survey, design, or construction shall be jointly and severally liable to the developer in respect of the work product completed by such third person. The contractor may not assign in whole to any third person the contracted construction project, or divide the whole contracted construction project into several parts and separately assign each part to a third person under the guise of sub-contracting. • The contractor is prohibited from sub-contracting any part of the project to an entity not appropriately qualified. A sub-contractor is prohibited from further subcontracting its contracted work. The main structure of the construction project must be constructed by the contractor itself.
• Article 313 Liabilities of Joint Carriers Using the Same Method of Transportation • Where two or more carriers jointly carry the cargo using the same method of transportation, the carrier contracting with the consignor shall be responsible for the whole course of carriage. Where the loss occurred at a particular segment, the carrier contracting with the consignor and the carrier for such segment are jointly and severally liable.
Classification of contracts • • gratuitous contract and onerous contract 无偿合同与有偿合同 whether a consideration is involved. OC：business contract/agreement of purchase and sale(买卖合同); Leasing contract(租赁合同) • LGC：gift contract（赠与合同）contract for borrowings(借用合同)contract of guaranty(保证合 同) • PGC：Agency Appointment Contract（委托合同） Safekeeping Contract(保管合同)Loan Contract between natural persons(自然人借贷合同)
• Article 366：The depositor shall pay the safekeeping fee to the depository in accordance with the contract. • Where the safekeeping fee was not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, the safekeeping is gratuitous.
• Article 211 Interest under Loan Contract between Natural Persons • Under a contract for loan of money between natural persons, if payment of interest was not prescribed or clearly prescribed, the loan is deemed interest free. • Under a contract for loan of money between natural persons, the interest rate on the loan may not contravene the relevant stipulations of the state regarding limit on loan interest rate.
• The subjects in GC should be liable only if the damage or lost is due to any intentional misconduct or gross negligence. • A 189: Where the gift property is damaged or lost due to any intentional misconduct or gross negligence of the donor, he shall be liable for damages. • A 374: If the deposit was damaged or lost due to improper safekeeping by the depository during the deposit period, the depository shall be liable for damages, provided that if the safekeeping is gratuitous, and the depository has established that it was without gross negligence, it is not liable for damages. • A 406: Under an agency appointment contract for value, if the principal sustains any loss due to the fault of the agent, the principal may claim damages. Under a gratuitous agency appointment contract, if the principal sustains any loss due to the agent‘s intentional misconduct or gross negligence, the principal may claim damages.
No Bona Fide Acquisition in GC • • Why？ reasonable Consideration 遗失物适用善意取得制度吗？ 物权法 第一百零七条 所有权人或者其他权利人有权追回遗失物。该 遗失物通过转让被他人占有的，权利人有权向无处分权人请求损害赔 偿，或者自知道或者应当知道受让人之日起二年内向受让人请求返还 原物，但受让人通过拍卖或者向具有经营资格的经营者购得该遗失物 的，权利人请求返还原物时应当支付受让人所付的费用。权利人向受 让人支付所付费用后，有权向无处分权人追偿。 • 遗失物一般不适用善意取得，只有在同时具备下列三个条件才适用善 意取得： 1、超过两年 2、权利请求人不愿或无力支付费用 3、受让人通过拍卖或者向具有经营资格的经营者购得该遗失物
How to conclud a contract? • You are in a farmers’ market and you want to buy some cabbage. There are four steps before the conclusion of the contract 1. You ask the farmer: How much money is your cabbage? 2. He replys: 2 yuan/kg, and he has 100 kg in all 3. You bargain with him: how about 1. 6 yuan/kg and I will buy 50 kg? 4. He agrees with you and you make the deal.
1. You ask the farmer: How much money is your cabbage? —An invitation to treat (nonbinding) 2. He replys: 2 yuan/kg, and he has 100 kg in all—an offer. 3. You bargain with him: how about 1. 6 yuan/kg and I will buy 50 kg? —a new offer. Why？ • material change（实质变更）--合同标的、数量、 质量、价款或报酬、履行期限、履行地点和方 式、违约责任、解决争议的方法 4. He agrees with you and you make the deal. —an acceptance
Offer • An offer is a party‘s manifestation of intention to enter into a contract with the other party, which shall comply with the following: • (i) Its terms are specific and definite; • (ii) It indicates that upon acceptance by the offeree, the offeror will be bound thereby. • 发价、发盘、出盘、报价 • An invitation to treat：拍卖公告、招标公告、招股 说明书、商业广告。 • 投标、拍卖、自动售货机—offer • 商业广告若内容清楚确定、足以使相对人知其对 待义务的也可构成要约。
Standard Terms 格式条款 • A 39：Where a contract is concluded by way of standard terms, the party supplying the standard terms shall abide by the principle of fairness in prescribing the rights and obligations of the parties and shall, in a reasonable manner, call the other party‘s attention to the provision(s) whereby such party‘s liabilities are excluded or limited, and shall explain such provision(s) upon request by the other party. • Standard terms are contract provisions which were prepared in advance by a party for repeated use, and which are not negotiated with the other party in the course of concluding the contract.
• A 40：A standard term is invalid if it falls into any of the circumstances set forth in Article 52 and Article 53 hereof, or if it excludes the liabilities of the party supplying such term, increases the liabilities of the other party, or deprives the other party of any of its material rights.
• Article 52 Invalidating Circumstances A contract is invalid in any of the following circumstances: (i) One party induced conclusion of the contract through fraud or duress, thereby harming the interests of the state; (ii) The parties colluded in bad faith, thereby harming the interests of the state, the collective or any third party; (iii) The parties intended to conceal an illegal purpose under the guise of a legitimate transaction; (iv) The contract harms public interests; (v) The contract violates a mandatory provision of any law or administrative regulation. • Article 53 Invalidity of Certain Exculpatory Provisions The following exculpatory provisions in a contract are invalid: (i) excluding one party‘s liability for personal injury caused to the other party; (ii) excluding one party‘s liability for property loss caused to the other party by its intentional misconduct or gross negligence.
• A 41：In case of any dispute concerning the construction of a standard term, such term shall be interpreted in accordance with common sense. If the standard term is subject to two or more interpretations, it shall be interpreted against the party supplying it. If a discrepancy exists between the standard term and a non-standard term, the non-standard term prevails.
liability for breach of contract • 1. 2. 3. 4. Mr Chen bought a care and had a car accident because of the broken brakes. What could Mr Chen do in this situation? Ask the seller to bear the liability for breach of contract. Aks the manufacturer to bear the liability for breach of contract and the liability of tort. Ask the manufacturer to bear the liabilty of tort, and ask the seller to bear the liability for breach of contract at the same time.
违约责任的承担方式 • 强制履行（履行费用过高，人身性合同或 债权人在合理期限内未要求履行的） 赔偿性违约金：可代替强制履行 • 违约金 惩罚性违约金：可与强制履行并用 A 114：Where the parties prescribed liquidated damages for delayed performance, the breaching party shall, in addition to payment of the liquidated damages, render performance. 当事人就迟延履行约定违约金的，违约方支付违约金后还应当履行债务。
the amount of the liquidated damages • A 114：Where the amount of liquidated damages prescribed is below the loss resulting from the breach, a party may petition the People‘s Court or an arbitration institution to increase the amount; where the amount of liquidated damages prescribed exceeds the loss resulting from the breach, a party may petition the People‘s Court or an arbitration institution to decrease the amount as appropriate. • 过分高于造成的损失：当事人约定的违约金超过 造成损失的30%
liquidated damages & deposit （违约金） （定金） • A 116: If the parties prescribed payment of both liquidated damages and a deposit, in case of breach by a party, the other party may elect in alternative to apply the liquidated damages clause or the deposit clause. • 根据最高人民法院相关的司法解释的规定，即使当事人在合同中措词 使用的是“定金”的字眼，但在合同中没有规定定金的性质，该“定金” 也不能产生双倍赔偿的法律效力。因此，当事人在订立合同时，如果 希望定金罚则能够得以实现，则必须在合同中明确约定出定金的法律 性质，即收取定金的一方违约将双倍赔偿，支付定金的一方违约将无 权要回定金。 • 此外，双方当事人约定定金条款时，应当注意以下事项：首先，定金 的金额不得超过合同金额的20%，如果超过该上限，超过的部分无效； 其次，合同中所使用的文字应当使用“定金”这一标准用法的文字，尽 量避免使用其他诸如“订金、保证金”等字眼，以免出现歧义给以后的 定性带来麻烦；最后，定金条款从法律性质来讲具有实践要物性，即 必须有定金的实际给付定金合同才得以成立。如果双方当事人只约定 了定金条款，而没有进行实际的定金款项交付，就不会出现一方当事 人违约将双倍赔偿的法律后果。
• 约定赔偿：可约定违约金也可约定因违约产生的 损失赔偿额的计算方法。 • 一般法定赔偿：A 113：Where a party failed to perform or rendered non-conforming performance, thereby causing loss to the other party, the amount of damages payable shall be equivalent to the other party‘s loss resulting from the breach, including any benefit that may be accrued from performance of the contract, provided that the amount shall not exceed the likely loss resulting from the breach which was foreseen or should have been foreseen by the breaching party at the time of conclusion of the contract.
• 特别法定赔偿： • A 113：Where a merchant engages in any fraudulent activity while supplying goods or services to a consumer, it is liable for damages in accordance with the Law of the People‘s Republic of China on Protection of Consumer Rights. • 《中华人民共和国消费者权益保护法》第四十九 条：经营者提供商品或者服务有欺诈行为的，应 当按照消费者的要求增加赔偿其受到的损失，增 加赔偿的金额为消费者购买商品的价款或者接受 服务的费用的一倍。
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