The Legal Regulation Of Double Moral Hazard In The Performance Of Intermediary Housing Sale Contract

With the rapid development of the real estate market in China，the intermediate exerciseof second-hand house trade become more frequent than before. Housing intermediator isdeveloping in the direction of specialization and professionalization. Moral hazard in theperformance of such contracts refer to the possible impairments of benefits done to onecontractual party by the other， who takes advantage of the information asymmetry betweenthe two parties. In the case of information asymmetry, moral hazard are not exclusively takenby one contractual party. At any time and under any circumstance, both parties haveopportunities to utilize their advantages in the information asymmetry. This is what is calledbilateral moral hazard. Examples in practice is increasingly confirmed this issue. The ContractLaw of the PRC, based on the assumption that only the intermediator has the chance tomaterialize moral hazard, tendentiously imposes more obligations on the intermediator thanon the client, intensifying the inequality in information and status possessed by the two parties,which violates principles of equality and justice respected by the Contract Law. In reality,clients are also capable of materializing moral risks in the performance of intermediaryhousing contract. In some cases, clients’ dishonest conducts in performing contracts can resultin the impairment of intermediators’ benefits. To avoid the double moral hazard in theperformance of intermediary housing sale contract, efforts should be made in eliminating theinformation asymmetry, maintaining the fairness in benefits distribution and ensuring thejustice in stipulating legal rights and obligations of contractual parties.This article is divided into four parts. The first part indicates that the uncertainty of thepayment and the payment obligation of the mandator is conditioned, this two aspects incontract of mediate, by analysis of the law construction of the contract of mediate whichreflects the particularity. And then based on this analysis, it is concluded that the morality riskoccurs in other contracts is more striking in contract of mediate and points out thepresentation of double moral hazard in contract of mediate. The analysis of this part willprovide the theoretical foundation for the following parts. The second part analyzes thedeficiency of the related current laws about mediate. In this part, mainly based on theregulation of chapter twenty-three of the Contract Law, points out the deficiency of therelated laws from the construction of clients’ right and obligation in contract of mediate. In the end of this part, aimed at the deficiency of the special law of housing sale meditate whichthis article will discuss,brief analysis is made. The third part is one of the key points in thisarticle, the main content is concretize the bilateral morality risk in contract of meditate tohousing sale meditate and points out that main modalities of the bilateral morality risk existedin housing sale mediate. To be specific, the intermediator hides important matter of facts orsupports false information and urges mandator to make a deal in order to get the meditatepayment;for mandator, the phenomenon of "jump-bill" is more and more frequent in contractof meditate and hides or supports false information which damages intermediator’s interestfinally. The forth part is the law regulation of bilateral morality risk existed in housing salecontract of meditate, divided into two parts: one part is to regulate from the legislation, theother part is to perfect from institution construction. In legislation, the key point is adapting tothe need of times development, sets theoretical trend of legislation right and strives to fulfillthe equity on right and obligation of the both parties of the contract of meditate. To be aspecific, there are three suggestions that explicating the range of truthfully-inform obligationof mandator, ruling the positive investigation of mediator and the truthfully-inform obligationof mandator. In mechanism, from the whole field of the housing sale meditate, combined withthe industry reality and need of development, related institutions should be perfected and thebilateral morality risk should be prevented from institution.