The Research On Rule Of Reasonable Foresight In Contract Law Of Peoples Republic Of China

In varied market, the parties' transaction is always in face of unanticipated risk. If the breaching party undertake all the consequential damages incurred by breach of contract , it will bring down the transaction activity of the parties or increase the cost of transaction, which cause the inactivity of social economy and waste of resource. Therefore, some restricting methods of damages was established to relieve risk and promote transaction. Rule of Reasonable Foresight is one of the restricting methods that was executed widest in the contract law in the world. Although this rule is stipulated in Contract Law of Peoples Republic of China, the specific framework of it is not constructed. Furthermore, the judges in China know little about this rule because they are affected by the principle of Full Compensation in German Law deeply. This article try to construct the system of Rule of Reasonable Foresight in contractual liability stipulated in Contract Law of Peoples Republic of China by analyzing theoretical basis, defects and settlement of this rule in a comparative study on other countries' contract law.The structure of this article is as follows:Chapter â…  explains the Rule of Reasonable Foresight in other countries' legislation and case law and concludes that the source of Itemâ… Article 113 of Contract Law of Peoples Republic of China is Common Law because it is on the neutral standpoint ,not the breaching party or the injured party, which is in favor of achieving the equilibrium of the parties and embody the aim of equity and justice of contract.Chapter â…¡ analyzes the theoretical basis of Rule of Reasonable Foresight. The theoretical basis of this rule is in accordance with the aims of Contract Law of Peoples Republic of China. Meanwhile, Rule of Reasonable Foresight is better than the Theory of Adequate Causal Relationship because the rule is in favor of achieving the equilibrium of the parties and embodies the aim of equity and justice of contract from a neutral standpoint. However, it is necessary to construct the specific system of Rule of Reasonable Foresight in Contract Law of Peoples Republic of China because the drawbacks of this rule still exist.Chapter â…¢ points out how to construct the system of Rule of Reasonable Foresight in contractual liability stipulated in Contract Law of Peoples Republic of China.