On The Foreseeability Rule In Contract Law

The rule of predictability plays an important role in the assessment of contract damages by acting as a restriction to full compensation principles of damages resulting from breach of contract. But the provisions in the legislative and judicial practice of the current legislation in China are obviously insufficient, which is mainly because the relationship between the theory and the standards for predictability rule is hard to define Therefore, based on the well developed theory provisions of predictability rule in other countries, the paper is to specify the conceptual definition of predictability rule from the point of basic theory using the method of combination of theory and practice and national cases are analyzed throughout the whole text. This paper conducts the research in detail on predictability rule from the following four aspects:The first chapter talks about the evolution and theoretical basis of predictability rule. The author reviewed the history of the formation and development of predictability rule, and introduced the emergence and development of predictability rule in French Law, Anglo-American Law and Japanese Law with evaluation and analysis. And then the author tried to research into the theoretical basis of predictability rule, i.e. what is the foothold of predictability rule? This paper holds that the establishment of predictability rule is mainly based on the principle of party autonomy, fairness and good faith.The second chapter talks about the applicable standards for predictability rule. The author mainly studied the basic structure of predictability rule. The study mainly involved the relationship among main subject of prediction, time of prediction, content of prediction, predictability rule and casual consequence and the standards for determining predictability rule. On the basis of analyzing and comparing the existing research results, the author made comparisons, analyzed and gave his own judgments.The third chapter shows five special problems in the application of predictability rule. The five special practical problems in the application of predictability rule mainly discussed in this paper deliver an analysis on the application restriction of predictability rule in practice from the perspective of judicial practice. This paper argues: First, the losses outside the scope of contract should be compensated, and it is reasonable to be borne by the breaching party; second, willfulness and fraud should be excluded in the application of subjective attitude of the breaching party; what is more, in the restriction of full compensation principles, predictability rule plays a supplementary and restricting role in the principles; and then for the compensation for moral damage caused by breach of contract, based on the analysis on laws of nations and study of our national laws, this paper points out that the compensation for moral damage resulting from partial breach in breach of contract can be made within the application of predictability rule; finally, this paper further demonstrates the key role of predictability rule in practice through the great importance of predictability rule in deciding the prices for sale, transportation or concluding service contracts on the basis of reasonable prediction and contract type.The fourth chapter talks about the deficiencies and perfection of predictability rule in our country. This paper makes analysis on the deficiencies of predictability rule in China in legislation and justice through the statement above on predictability rule and proposes suggestions for perfection. Relevant provisions are made on predictability rule in Article 113 of Contract Law, but no relatively unified criterion has been prepared for the range and standards of prediction, which leads to great difficulty in the application in judicial practice. Currently, such criterion only relies on the judgment by judges at their discretion. Therefore, this paper holds that, judicial provisions on predictability rule should be made clearly as early as possible at the same time of enhancing the quality of judges, which not only furnishes a basis for judges in judicial practice, but also better restricts the discretion of judges.