Study On The Reliance Damage Liability

The structure and main content of this dissertation are as follows.The protection of reliance consists of positive reliance protection and negative reliance protection.Positive reliance protection is a legal result which secures the state that the innocent party relies could be realized,to protect the third party's positive interest.Negative reliance protection offers innocent party the claim right for the compensation of damage to the reliance interest because of his reliance,to protect the third party's negative interest.This dissertation explores the negative reliance protection and calls it the reliance damage liability which is included in reliance liability system set up by Karl Larenz.The reliance damage liability involves those arise from unauthorized agency,from misrepresentation and from the revocation of offer and reward advertisement and other specific types of contractual liability, which is deemed to be an abstract of these specific types of contractual liability.This abstract establishes a natural link between specific types of contractual liability and the principle of reliance keeping the content of negative reliance protection systematic,consistent and open, and laying a solid theoretical ground for the legal practice.The content of the dissertation includes the following five chapters.Chapter one is concerned with the basic definitions of reliance damage liability,such as reliance,reliance interest,reliance protection and the scope of protection,which is the logic beginning of the whole.Firstly,the dissertation compares the conception of reliance to reliance interest.In private laws,reliance is a psychological goodwill based on general social knowledge and apparent condition,and it drives people to act or omit,which will cause certain legal consequence.The conception of reliance interest created by Fuller,means the costs or loss of opportunity as the result of one party's reliance.In America,the damage to contractual cost is included into breach of faith liability,while the loss of contractual opportunity is included into tort liability.Jhering brought the reliance interest and restitution interest of Fuller's theory into the negative interest of contracting fault liability theory.However,Jhering believed compensation of negative interest could only be possible when contracts become void or untenable.The different legal systems of German and USA lead to the different types of civil liabilities.The article 284 of Germany new law of obligations takes the contractual costs into the liability for breach of contract to implement the compensation of performance interest. Scholars in Taiwan bring contracting fault theory into the conception of reliance interest and take the contracting fault to be reliance interest damage liability.This dissertation deems the reliance interest as an interest in private law which belongs to the category of property value. It is necessary to case off the differences of the protection of reliance interest between Civil Law System and Common Law System,and define it substantially based on the change of value of the parties.To the civil subjects,reliance interest is the interest enjoyed immanently by the party who trusts a contract or an offer,but it may be damaged or has been damaged because of such reliance.It includes property interest and opportunity interest.Though reliance and reliance interest differ in protection pattern,they are mutually preconditioned.Secondly,this chapter defines the conception of reliance protection.Reliance protection is the negative legal consequence that the party gets what he expect or the negative legal consequence that the party is relieved by reliance damage,both of which are arising from the actions of such parties as they reasonably believe the appearance of rights or the apparent intention by other party,on the legal grounds of the balance of autonomy of will and transaction security.Because of the neutrality of the reliance interest,there are contracting fault,breach of contract,tort and sheer reliance damage liability in different legal systems.So the reliance damage liability differs in level with the above types of liabilities.Thirdly,this dissertation defines the conceptions of reliance damage liability and differentiates it from reliance interest damage liability or contracting fault liability,following Larenz's opinion.Reliance damage liability is an appropriate restriction of autonomy of will as it maintains its significance.Therefore,in order to balance transaction security and autonomy of will,when a party relies on right appearance and apparent expression of intention,and he suffers loss or losses rising from this reliance,it obliges the defaulting party to compensate for the party who believe he would gain the interest.This liability is the reliance damage liability in this text.Chapter two demonstrates the development of reliance damage liability.Because of the different reliance protection systems in civil laws and Anglo-American laws,the chapter comparatively explores the systems in the two legal systems,based on the historical foundation of the notion and legislations in Roman Law.Firstly,the conception and legislation in Roman Law era.Though the conception of reliance protection emerged in Roman law,its scope was narrow and lacked systematic theory and definition.As the formation of contract shall obey rigid patterns,the expression of intention could not give birth to reliance,and Roman law attached importance to reliance protection stemmed from the right appearance.Secondly,discuss the evolution of virtually reliance damage liability in continental law and common law.Those in Germany are the mainline for the research of Civil Law System.In fact,the Prussian Federal Law 1794 had specified the types of reliance damage liability,those are contract formed by mistake,revocation of offer and unauthorized agency.A German scholar R. Jhering proposed the theory of contracting fault and classified these types into contracting fault liability.German Civil Code 1896 did not adopted his theory,instead,it inherited the provisions of those types specified in Prussian Federal Law and stipulated that the loss or losses caused by contract formed by mistake or unauthorized agency shall apply the imputation principle of strict liability.Therefore,the essence of reliance damage liability was brought into legislation.However,the academic in German followed Jhering's theory.Then many theories and judgments came out to repair the defects of tort law and the application of contracting fault theory in practice breached the boundary of Jhering's design.The failure of pre-contractual performance would constitute contracting fault liability.It was not only limited to several types stipulated in the Code,but also violated the tradition that only in unformed contract or invalid contract shall faulty contracting liability apply.Should there was any breach of pre-contractual obligation,it still constituted contracting fault.The theory proposed by German scholar was introduced to other countries in Europe,China and Japan in Asia.In 2002,the German legislators incorporated the theory into the amendment of Civil Code.However,the obscure contracting fault liability concealed the already existed reliance damage liability in Germany legislation.As the wrong notion has spread to other countries, the independence of reliance damage liability hasn't be recognized and the legislations was influenced.Thirdly,the study of Common Law System is mainly based upon the historical devlopment of UK and USA contract laws.In UK,the doctrine of estoppels only revised the strict cause theory.Consideration theory dominated,and its application would lead to validity or invalidity.Therefore,the application of doctrine of estoppels in contract was limited,only in the formation of contract.The debt reduction in contract alteration caused by reliance could not served as a ground for sue,which was not beneficial for reliance protection.For the sake of protecting reasonable reliance,the doctrine of estoppels was also adopted in US judicial precedents.At first,the judges ruled that the contract was binding only under the circumstance it was justifiably trusted though lacking cause,but the compensation for the suffering party was all or none.You can find this practice in the Restatement(First) of Contract.Fuller believed that when reliance interest was certain while expecting interest was not,for the convenience of legal practice,the plaintiff may sue for his reliance interest.His theory influenced the Paragraph 1 Article 90 in the Restatement(Second) of Contract which indicated that reliance damage liability was justifiable in contract.The damage in Common Law System and that in Civil Law System are in common in nature but different in the forms.Chapter Three analyzes the legitimacy of reliance damage liability,whose central task is to restrict properly the autonomy of will of the defaulting party based on the relying party's reasonable trust.Thus the reasoning about the legitimacy of reliance damage liability involves the demonstration of the reliance rationality of relying party and the justification of appropriate restriction on autonomy of will of defaulting party.From the angle of epistemological theory,gnosticism and agnosticism,as two important theories relating to the main issue in epistemology,conflict in the question whether human can understand the real world,but they hold the same opinion that the cognition of truth is relative and human's ability of cognition is limited.Thus,a conclusion can be made that it is impossible to cognize a whole and real world.Reasonable people act and behave according to their cognition of objective world.With the impossibility of the pursuit of utter truth,laws have to evaluate people's cognition based on the knowledge of facts which a reasonable person has.It is essential to set up a reasonable cognition standard.So it is necessary to prescribe an epistemological standard in legal field from epistemological perspective.Secondly,according to epistemology,the rule of people's cognition of legal fact tells us we should stick to the objectivism in setting up this standard.In civil law,the cognized subject can be classified into self-cognition and external cognition.self-cognition refers to that the subject perceives and estimates the value of his own interest,which is really subjective.The self-cognitive error caused by the external cognitive error will result in reliance.Therefore,when examine whether there is any justification in the external cognitive error of a relying party,we should analyze it from the angle of recipient,together with the objectivistic standard.From the angle of axiological theory,the system of reliance damage liability could balance the conflict of positive freedom and negative freedom.The former one emphasizes the initiation and autonomy of people's activity,while the latter one stresses the non-intervention in others'freedom.Both reflect freedom from different perspectives and enjoy justification.The laws protect positive freedom mostly,and give attention to negative freedom meanwhile.Reliance damage liability is just the balance result of the laws.While balancing the conflict of contract freedom and the transaction security,reliance damage liability safeguard the bottom line of transaction security.Finally,this chapter discusses the balance of efficiency and safety.Reliance damage liability which combines efficiency and safety to confirm the ration standard of reliance party realize the maintenance of the two values.Chapter four explores the construction of the system of reliance damage liability.The indispensable parts of its independent system must include the unattached guiding principles, the foundation of value,the distinct system of reliance rules,the fundamental elements of liability and several types of liability.This chapter follows this logic,from macro to micro perspective,to devise the system of reliance damage liability.Firstly,the independent principle of reliance which is subordinate to the principle of good faith and honesty,guides the principle of reliance protection.It is applied to two fields, one is the reliance based on the expression of intention,which makes up the system of the negative reliance protection,and the other is the reasonable reliance based on the appearance of rights which makes up the system of the positive reliance protection.These two protection systems compose the system of reliance rules which is independent from autonomy rules system and contracting fault liability rules.And the damage liability under negative reliance protection rules is just the reliance damage liability.Secondly,conclude the requirements and compensation scope of reliance damage liability.The subjective element of reliance damage liability should adopt the imputation principle of strict liability,and the good faith of the injured party is the premises of the principle of strict liability.The principle of strict liability,as the standard to distinguish various liabilities,excludes reliance damage liability from the liability in illegal contract and compensation liability in anti-compulsory contracting liability.The objective elements include the appearance of rights,the expression of intention,reliance expression,reliance damage, and the causation between reliance and damage.The compensation scope of reliance damage liability is reliance interest.Based on the legislations of German,France,UK and USA,this dissertation suggests bring the loss of contracting opportunity into the compensation scope of reliance damage liability and take the upper limit of the performance interest.Finally,this chapter discusses the requirements and compensation scope of the typical types of reliance damage liability which involve the liabilities stemmed from unauthorized agency,the wrong reliance and the revocation of offer or reward advertisement.Chapter Five exemplifies and propose suggestions on reliance damage liability based on the demonstration study.This chapter reflects the deficits of reliance damage liability in China and put forward legislative suggestions.Firstly,rethink the defaults of reliance damage liability in our system.Reliance damage liability has not been made as an independent form of liability in Chinese legislation or legal practice.In Chinese legal system,there is still a blank concerning reliance damage liability for that the acts which give rise to traditional reliance damage liability in German can only be classified into the realm of contracting fault liability whose basis is the fault.Due to the lack of relevant legislation,the courts deem the consequences from such acts as contracting fault liability,ignoring the classification for invalid contracts or the rescission of contract.Because the future Tort Law of China is designed to be open to the protection of rights,contracting faulty liability is quite likely to be licked up by tort liability.Therefore,it is necessary for China to enact law concerning the independent reliance damage liability.Secondly,to construct the types of reliance damage liability,this chapter discuss the defects in our legislation of reliance damage liability for unauthorized agency and revocation of offers,while the reliance damage liability for fault expression party has been explored by Dr.Zhu Guangxin.Meanwhile,to fill up the blank of legal liability invoked by the revoking of reward advertisement,this chapter suggests learn from other advanced legislations and set up the responsible party's reliance damage liability from the situation of our country.Based on the discussion aforementioned,some suggestions are put forward in this chapter for legislation on the reliance damages liability arising from unauthorized agency,the revocation of offers and reward advertisements.The innovations of this dissertation are as follows.Firstly,it provides new perspectives for defining“reliance interest”.The dissertation clarifies the evolution of the conception in the contracting fault theory in Civil Law System, and finds the same essence from the definitions of reliance interest in Anglo-American Law System.Reliance interest should be summarized into the scope of property value rather than any specific civil liabilities.Therefore,it is necessary to start with the variability of value to give a substantive definition,instead of being limited in specific legal systems.Secondly,discover the real history of fault contracting liability in German law.In the research of Jhering's theory,it is found that Prussian Federal Law 1794 had been already formulated several essential types of reliance damage liabilities,such as the liabilities for contracting fault,revocation of offers and reward advertisements.Thirdly,to clarify the misconceptions about the simple equivalence of reliance interest damage liability and contracting fault liability.Drawing on the views of Anglo-American law and concerning the latest changes in German law of obligation,to expound the viewpoint that reliance interest damages could get relief from liability for breach of contract,tort and traditional contracting fault.In order to break through the traditional theory that takes compensation for reliance interest as a distinction between the liability for breach of contract, contracting fault and reliance damage liability.Fourthly,to present the substantive features and independent elements of reliance damage liability,this dissertation suggests separate it from contracting fault liability to re-construct the liability system.Fifthly,upon the reference of advanced foreign legislative experiences,and in view of the lack of Chinese legislation,this dissertation puts forward the following legislative proposals on the liabilities for unauthorized agency and revocation of reward advertisement.Nevertheless,studies on this issue are still in its infancy and need further study.In the conclusion of this dissertation,some issues which yet require further studied also be raised.