Analysis Of The Principle Of Changed Circumstances And Its Application In China

Changed circumstance,which is a modern civil law system of great importance, has not, however, been stated into Chinese "Contract Law". This article is divided into six parts as follows which includes the legal basis, the legislative practice of pa ticular nations, the legal elements of changed circumstance, the legal consequences as well as the feasibility of our legislation.The first part describes the dramatically different stances taken by the Chinese legislature and the judiciary concerning the system. The attitude held by the legislature is negative which can be demonstrated by reviewing the tortuous process in the revision process of the draft of "Contract Law", while the judiciary is beaming positively in the first case of changed circumstances-"Wuhan Gas Co.V. Chongqing Detection Instrument Factory". And the stance of the judiciary can also been observed by the Article 26 in the latest "Judicial Interpretation of Contract Law"The second part describes the legal theories of changed circumstance in the mainstream. In the Civil Law System there are three representative theories as follows: the theory of implied terms, the theory of good faith as well as the theory of the legal basis, In the Common Law System, the frustration of the contract shares a lot of common grounds with the changed circumstance,which was built up on the verdicts of implied terms as well as the changed obligations.The third section lists the legal provisions of Germany, Greece, Italy, Japan and France on the subject, and makes a comparative analysis of the reasonable as well as the unreasonable parts of all the provisions.The fourth part analyzes the six legal elements of changed circumstance, and mainly focuses on the procedural element of the "re-consultation obligation", which includes its concept, the provisions and the legal problems that may confront it.The fifth part analyzes the legal consequences of the changed circumstance-to change the contract and to be released from the contract. And the issues of retroactive as well as the compensation of damages are comprehensively discussed.The last part discussed the feasibility of making specific article of changed circumstance in the Chinese "Contract Law" on the basis of the former parts. And the differences between the change circumstance and the force majeure as well as the normal business risk are also discussed. It has also been noted that a judge may abuse the discretion during the application of the changed circumstance, and some countermeasures have been thus suggested.