On Compensation Of Contractual Reliance Interest

The protection of reliance interest is the inherent requirements of principle of good faith as well as necessity for comprehensive protection of parties' interest under the background that Individual-based Principle has shifted to Society-based Principle under contemporary private law. The integration of global economy and gradually frequent happening of commercial transactions calls for overall and in-depth study on protection of reliance interest.The contractual reliance interest consists of three elements: reliance on the other party; damage to reliance; facts leading to void contracts. Such interest involving all the three elements is reliance interest. The basis of claim rights ascribable to compensation to reliance interest is the legal norm for stipulating the credit for compensation to reliance interest. Such claim right is established on basis of certain rights and it is creditor's rights. The objective damage, one of the elements underlying the compensation to injury of reliance interest, excludes non-property damage. With respect to the subjective element, it requires subject negligence of the inflictor and non-fault of victim. The compensation to injury of reliance interest should be limited to the virtual injury to reliance interest and the injury compensated should be reasonable and necessary. The injury resulting from loss of contracting opportunities should be protected. The contributory negligence rule and mitigation rule should not be applied in compensation to injury of reliance interest while the reasonable foresight rule and benefits rule could be applied therein. The compensation to injury of reliance interest is irrelevant to implementation interest and therefore is not limited to the implementation interest. The compensation to injury of reliance interest should not cover the spiritual injury. In principle, the victim should bear the burden of proof regarding the fault of the opposite party in connection with imputation principle for compensation to injury of reliance interest except that the reversal of burden of proof may be adopted in special circumstances where the laws prescribe otherwise. The compensation liabilities to injury of reliance interest should co-exist with tort liabilities and liabilities of breach of contracts.The development of reliance interest theory in Common Law system has gone through three stages: the Doctrine of Consideration; the Doctrine of Promissory Estopped; Reliance Interest Principle. The protection of reliance interest in common law system and continental law system shares similar features in the functions of defending social interests and realizing substantive justice, the top principle guiding compensation to injury, the pre-contract liability and extension of contract liability, reasonable limitation to contractual freedom and intent autonomy principle, but differs in the legal consequence and basis for protection of reliance. Based on the analysis of international conventions and international practices or usages, it may be concluded that the UN Convention on Contracts for the International Sale of Goods (CISG), which does not refers to the effectiveness of contracts and ownership, is very conservative; the Principles of International Commercial Contracts, incorporating the relevant provisions of the common law system and continental law system and setting out relative comprehensive and concrete provisions on reliance interest, is broader in the protection of reliance interest, and therefore more instructive for purpose of practice.With respect to legislation of reliance interest, it is most important that the provisions for compensation to injury of reliance interest should be separately formulated, which should be set forth as the key part of Liability for Contracting Negligence. With respect to judicial protection, the solution most favorable to the two parties should be adopted in legal practice besides the provisions of laws and regulations. Lastly, we could also reference the case law study of common law system and form the system of contracting negligence from legal practices and then draft one comparatively complete and regulatory judicial interpretation rule based on the precedent cases.