Contract Loophole Legal Regulation

Through making a contract, parties form their rights and obligations. Rights and obligations derived from mutuality is reasonable and enforceable. Indeed, looking around us,we have surpised that the contract is everwhere in our daily life. But, there are gaps in contract. Inview of it, how we can regulate it? The thesis is about Legal regulations on gaps in contract.The thesis contains four parts. The part one is about the outline of Legal regulations on gaps in contract. First of all, what is gaps in contract? It means indefiniteness in an agreement in Common Law System. The reason of indefiniteness in an agreement are that parties never provide all of the content of a contract, they may not give enough attention to detail, they may not clear in their thinking or articulation of what is expected or they may avoid confronting thorny issues that threanten to collapse the deal. Beside, the cost of dealing is another reason which made it.It is necessary for us to have a mechanism to solve this problem. Generally speaking, we have two ways of regulating it which are Contract interpretation and Filling in gaps.The part two introduces filling in gaps which is one of the ways on Legal regulations. Filling in gaps aims to the loopholes which actually not exist in contract, so it is different from contract interpretation. Filling in gaps includes such two kinds of ways as arbitrary regulations and construction. Construction, also called implication in law, is likewise concerned with the ascertainment of meaning, but it goes beyond available facts to find, not necessarily what the parties did mean, but what they probably would have meant in making the manifestations that were made. Arbitrary regulation is a provision legally implied into a contract to supplement or clarify its express language. Arbitrary regulations are standard terms supplied by law. It contains two types: 1. Arbitrary regulations that supple general obligations; 2. Arbitrary regulations supple more specific rights and duties.The part there is about contract interpretation. About the standards of contract interpretation, subjective theory and objective theory are two standards. Many countries have adopted the standards of subjective as mainly and combine objective now. Combining the related rules in modern continental law system and Anglo-American law system, the interpretation of general disputed items mainly including as following: 1. the rule of interpretation of meaning, according to the meaning of contractual sentences, to interpret contract. 2. the integral interpretative rule to make the whole contractual clauses and parts as an integer, interpret the meaning of disputed clauses from the mutual relationship between contractual clauses and parts and the position. 3. the intentional purpose rule, according to the economic and civil effect the parties want to reach interpret the contract. 4. the custom interpretation rule refer to the frequent customs and rules in economic and civil activities. 5. the historical interpretation rule, by the background of contractual clause, including the social background and culture of agreement to determine the meanings of disputed clauses. 6. Duty of good faith requires that the judge should take the stand of the parties involved and perform duty of good faith in interpreting the contract. 7, the interpretative rule in which the interpretation of disputed clause is not beneficial to the provider of clause.The part Four analyzes the current situation of Legal regulations on gaps in contract in our country, and suggests a series of suggestions to perfect the system. Although the Contract Law promulgated in 1999 firstly confirmed the contract interpretation, and firstly constructed the structure and system of contract interpretation system in our country, it is still too abstract and not easily to operate, some contradictions still exist. Therefore, the thesis puts forward some suggestions from the legislative and judicial aspects.