Efficient Breach Theory In The Administration Of Justice In China

Efficient breach theory is an important policy and important theory in Western countries, especially in common law countries. Its prominent contribution is to introduce the "efficiency" in an economics sense to the field of law of contract so as to remedy the deficiency in simple legal analysis. Nevertheless, as a result of the same reason, the efficient breach theory is subject to widespread criticism. Some believe that the efficient breach theory contravenes morality and disregards the principles of fairness, justice or good faith. There is however no doubt that following rapid social economy development, the efficient breach theory is becoming more important and being relied upon more successfully. Notwithstanding that the efficient breach theory is not recognized by civil law countries, the efficient breach theory should not be denied in value.This article is about to provide a preliminary discussion as to how to link up the efficient breach theory with judicial practice by reference to housing sale and purchase disputes under new real estate policies and collaboration between theories and practice. This article shall be divided into four chapters.Chapter one is "the efficient breach theory overview" which contains review, analysis and conclusion in respect of the efficient breach theory origin and development. By starting with the origin of efficient breach, this article makes a brief introduction to the doctrine and the Coase Theorem Holmes and set out the comments by Posner to the efficient breach theory. Based upon the above introduction, the controversial concept and classification of efficient breach theory shall be revealed in this article.Chapter two is "the basic theory of efficient breach". This chapter shall provide more details on the efficient breach theory by introducing its objectives which are to pursue the maximum of social value by means of effective resource allocation. From the perspective of transaction costs in economics, this chapter emphasizes the core element of the efficient breach theory-damages, by economic analysis and review on impact of damages and actual performance rules on contractual breach and efficient breach act, in order to summarize the theory of efficient breach in the law of contract.Chapter three is "comments on the efficient breach theory". This chapter shall make two parts in respect of criticism to efficient breach. Part one is dealing with the issue of value, including morality, justice, fairness and good faith. Part two is concerning such technical issues as operation of efficient breach and sets out analysis and comments on efficient breach in value and morality, justice, fairness and good faith, with the conclusion that efficient breach does not violate legal values. This chapter also lays out the relation between efficient breach and actual performance, the final conclusion reached of which is that the efficient breach theory does not deny the value of actual performance as remedy, while provide strong support towards actual performance.Chapter four is "review on introduction of the efficient breach theory to our judicial practice". This chapter describes the legislation and judicial practice of efficient breach in common law systems and points out the lack of efficient breach theory in our civil laws has caused loads of problems in resolving the contract disputes in courts. By introducing the side effect of lack of efficient breach theory, this chapter concludes the need of introducing the efficient breach theory to our law of contract. Thus, the author has raised some advice on introduction of efficient breach theory in our contract law legislation.