Study On The Application Of Article 113 Of Contract Law Of China

In the unpredictable market, the parties to the dealings face kinds of uncertain risks; therefore, breach of contract occurs often. After losses incurred in breach of contract, one of focuses of attention is how to ascertain compensation scope so as to compensate observant party timely, sufficiently and efficiently and protect interests of observant party. In order to avoid discouraging the enthusiasm of engaging in dealings, increasing vainly transaction cost, leaving social economy stagnant and wasting resources. Article 113 of Contract Law imposes a limit on the principle of full compensation and establishes the foreseeable rules to reduce risks and encourage dealing.As one of the classic rules of Contract Law, the foreseeable rule, widely applied as a limit means, is expressed only in a few words in Contract Law of China, which is still in the stage of use for reference and retailing, and is lack of maneuverability and application experience in trial practice. Therefore, the dissertation holds that study on the foreseeable rule is conducive to an exact understanding of Article 113 Contract Law of China, so as to serve the litigation on loss compensation in breach of contract. Thus, the dissertation introduces the principle of full compensation and the foreseeable rule with cases in the first place, probes into the foreseeable rule and puts forward some constructive proposals. The dissertation is divided into three chapters.Chapter one introduces the principle of full compensation and the foreseeable rule stipulated in Article 113 of Contract Law of China with a classic case.Chapter two is divided into three sections to study the principle of full compensation and the foreseeable rule, which puts an emphasis in composing factors of the foreseeable rule, that is, its subject, time, content, degree, standards and other factors, limit to application of the rule as well as excluding the use of the rule in indented breach of contract. Meanwhile, in the author's opinion, the rule should be improved, in other words, the rule is excluded in intended or grossly negligent breach of contract and the standards of the rule should be replaced by those which are dominant in objective standards with subjective standards as a amendatory, and are to balance the interests of the parties and to promote successful dealings.Chapter three analyzes the case mentioned in chapter one referring to the rule and relevant laws to validate the application of the rule. The end draws a conclusion that the principle of full compensation and the foreseeable rule stipulated in Article 113 of Contract Law of China have great significance; however, they need constant improvement so as to correctly guide judicial trial practice.