Research On The Validity Of Minimum-Guarantee Clause

Being as a way of distribution of benefits between the parties,minimum-guarantee clause is popular in common economic activities.Given the obligor in the minimum-guarantee clause bears much more riskliabilities seemingly, researchers and relevant legislations hold a negativeattitude toward the validity of minimum-guarantee clause. At present, onlythe “Answers to Issues on the Trial of the Joint Venture Contract Disputes”,promulgated by the supreme court,“Law of the People’s Republic of Chinaon Chinese-Foreign Contractual Joint Ventures”、“Law of the People’sRepublic of China on Securities”,“Law of the People’s Republic of Chinaon Securities Investment Fund”and sort of regulations have clearly definedthe validity of the minimum-guarantee clause. In the occasion that norelevant regulations are found, the judges tend to recognize the contract asa joint venture contract, and determine the validity of theminimum-guarantee clause with the supreme court “Answers”. As a result,the questions we face now are whether there is necessity of the existence ofminimum-guarantee clauses, and what kind of criteria we should apply toin the judgment of validity. The absence of legislation makes the problemsmuch real and urgent.This paper is divided into three sections: introduction, text, andconclusion.The introduction part puts forward the research background, status ofdomestic research, and research methods. The text is divided into four chapters.Chapter One, Analysis of the Minimum-Guarantee Clause Concept, isdivided into two sections. Section I defines the concept and types ofminimum-guarantee clause. Section II distinguishes the types of thecontracts which involve the minimum-guarantee clauses, and sets theresearch limited to these types of contracts.Chapter Two, Minimum-Guarantee Clause and Validity of Contracts,is divided into three sections. Section I shows the controversial theoriesabout the validity of minimum-guarantee clause, and makes summary ofthe main reasons about these various points. Section II describes theattitude held by the relevant legislations on the validity of theminimum-guarantee clause, and summarizes the application fields of theseregulations. Section III introduces the practice of judgment on the validityof minimum-guarantee clause.Chapter Three, Rethinking of the Prohibited Provisions on Validity ofMinimum-Guarantee Clause, is divided into two sections. Section Ianalyzes the application fields of “Law of the People’s Republic of Chinaon Securities”,“Law of the People’s Republic of China on SecuritiesInvestment Fund”and sort of regulations in detail, and concludes that theseregulations can apply only to securities, funds, trusts and asset managementfields. Section II concludes that the application field of “Answers” shouldbe narrowed strictly by analyzing the changes happened in the legislationbackground.Chapter Four, Re-positioning of the Validity of Minimum-GuaranteeClause, is divided into three sections. Section I points out the defect of“characterization criteria” adopted by judges before, and establishes a kindof “substantial judgment standard” to identify the validity ofminimum-guarantee clause. Section II sets the minimum-guarantee clausein the co-operative type of contract as a main research object, and tries tomake effective explanation to the validity of the minimum-guarantee clausewith the “substantial judgment standard”. Section III demonstrates thespecial issues which might be involved while judging the validity ofminimum-guarantee clause in other types of contracts.The conclusion part points out that the minimum-guarantee clause should be permitted if it doesn’t violate the compulsory legislations. Theauthor hopes that the results of this study will be valuable for China’s futurejudicial practice on judgment of the validity of minimum-guarantee clause.