Breach Of Contract And Compensation For Moral Damage

In China, it is thought that mental loss is not recoverable in contract. This article attempts to challenge the reasonability of this opinion. In order to analyze this problem, the article is divided into the following parts.In the first part, the author holds that contract liabilities excluded mental compensation doesn't favor protection of man's mental interest and that liability concurrence can't fully safeguard man's mental interest.In the second part, the author compares and analyzes cases happening in English law, American law, French law, Germany law, and European Contract law, in which victims were awarded the damages for mental loss. Thus, the author concludes that mental loss caused by breach of contract is popular phenomena and that values behind these judgments are to respect man's dignity and to pursue material justice. Furthermore, the author argues that we should make relevant law in this field after combing our legislation and judicial practice.In the third part, the author analyzes breach of contract and mental compensation in terms of jurisprudence. First, to incorporate mental compensation into contract liability accords with value-orientation of mental compensation. Second, it is not adequate to safeguard man's mental interest by liability concurrence theory because contract liability and tort liability differ in doctrine of liability fixation, proof burden, limitation of actions and jurisdiction. The innocent part's mental loss can't be recoverable under non-concurrence circumstance. Third, mental loss can happen due to both breach of contract and tort. Mental compensation therefore should be applied to contract liability and tort liability. Last, propertilization of mental interest, the common between contract law and tort law and expansion of contract relations requires mental compensation to be included in contract liability.In the fourth part, the author rebuts some opposite opinions. First, foreseeability test. In cases, in which victims were awarded the damages, mental distress can be foreseen. So are the cases in China. Moreover, if law provides that mental distress is recoverable by breach of contract, the prospective breaching part would carefully perform the contract, whereas the other part would be more liable to sign contracts. Second, the difficulty of proof. It is a technical problem not asubstantial problem. Mental loss can be presumed by the common person and discretion of judges. Third, the problem of assessment. It is also a technical problem not a substantial one. Last, general public policy. Awarding damages for mental distress shall not raise costs of transaction but urge the party to respect the correspondent part's mental interest.In the fifth part, the author discusses limits to mental compensation of contract liability. Parties can't be awarded mental damages in business contract. The scope of mental damages should be limited by forseeability. Also certainty and seriousness doctrine, namely, mental loss can be recoverable only when it is certain and reaches a serious degree; priority of other remedies and classification-parties not to obtain pecuniary interest but enjoyment of mental interest; to get rid of agony, pain and sufferings; physical inconvenience and discomfort; loss of amenities; contract object shouldering material sentimentality; loss of intangible value due to loss of opportunities.To incorporate mental compensation into contract liability can better safeguard man's mental interest, which is in line with the trend of modern law's development.