Legal Regulation On Unfair Contract Terms

Regulating unfair contract terms dated back to laesio enormis in Roman Law, which was adopted by Justinean Civil Code. The French Civil Code inherited this rule, but expanded its scope of application from mere land to real estate, entitling the buyer the right of recission of contract when he suffered a loss up to seven twelfths of the immovables’value compared to the objective value of the targeted matter. In comparison, the BGB didn’t take in such a mathematical formula. It utilized the Principle of Good Customs (public policy) and Wuchergeschaefte (sudden huge profits) theory to regulate unfair contract terms. Both Nopolian Code and the BGB had great influence upon the following civil codes. The Swiss Law of Obligations、the Civil Code of Japan and the Civil Code in Chinese Taiwan learned from BGB.Traditionally, the Common Law in Anglo-American legal system didn’t care about the improper price. Only when the bargain was so unbalanced that it greatly affected the conscience of the Chancellor did he decide that the contact be not executed. Yet, confronted with the greatly changed situations, the Anglo-American law cannot tackle the unfair terms deriving from standard adhesion contracts related to consumers effectively. Therefore, UCC was enacted in the United States and Unfair Contract Terms Act was made in England.As to international legal documents, PICC and PECL both make control of unfair contract terms. The EU Directive on Unfair Contract Terms in Consumer Contract gives special protection to consumers. These three require that transaction comply with the Principle of Good Faith and Fair Dealing. From this, a conclusion can be drawn that the above principle has been accepted by the most countries.As for the elements of unfair contract terms, the subjective general element and objective element are required in relative article in BGB、UCC、PICC and PECL, though their subjective elements are not entirely the same. As to objective element, these legislations don’t adopt the definite formula but an abstract standard. Therefore, judges have to evaluate whether the terms are seriously disproportionate according to specific circumstances.In respect of standard contract, Articles 305-310 of BGB utilizes good faith as the general clause, then gets it concreted by three-layer assessment. The UCTA of England took in the "reasonableness" as the standard to assess contract terms and listed factors for consideration. As for the EU Directive, its mode of general clause plus black list for regulating unfair contract terms has been adopted by all member countries. Based on research on unconscionability and unfair terms in standard contracts, the author summarized the experience and drew a conclusion that provisions for legislation reference have been made by the author.The General Principle of Civil Law and the Contract Law put the German Wucher rule into two rules, namely "Taking advantage of other person’desperate situation" and "severely disproportionate". This mode is contrary to rationale and the common rule in most countries and international legal documents. The former should be the subjective element of the latter just like the German law.This dissertation falls into five Chapters.The first chapter is about the history and the theoretical basis on the regulation on Unfair contract terms. Starting from the pursuit of the origin of this problem, this paper studied the Roman Law and the viewpoints of Roman Jurists. Then, from the pointview of philosophy, the author examined the relationship between the freedom of contract and the justice of contract. The conclusion is that the fromer is the prerequisite of the latter, while the latter need to be corrected by the former.The second chapter is about the indirect regulation on unfair contract terms, including incorporation、contra proferentem rule and disclosure of information.The third chapter deals with the direct control on unfair contract terms. The author examined Good Customs(Public Policy) and Wucher(sudden huge profits) rule in German BGB, the lesion in French Law, the Equity theory in British traditional law and the Reasonableness in Unfair Contract Terms Act, the Fairness in EU Directive, the Unconscionability in UCC 2-302, the Principle of Good Faith and Fair Dealing and the substantial imbalance in PICC and PECL.The fourth chapter made further research on the general elements of unfair contract terms, thinking that the general elements constitute the subjective element and the objective element.Then this dissertation discussed the factors of the subjective element and how to make objective element concrete. Meanwhile, the certainty and flexibility of law was discussed.Based on the above research, in combination with the legislation judicial practice and the theoretical outcome, the last chapter examined the shortcomings of the relative Chinese laws and put forward the standard of judgement of unfair contract terms. The mode is that a combination of general clause with a grey list which has been adopted by most countries.As for the methods of research, comparison of laws is the leading method, together with historic research analysis of legal norms and the sociological method. In this way, this dissertation drew a convincing conclusion based on clear argument and valid reasons.