On Explanation Of The Rule Of Mistakes In The Area Of Contract Law

The problem discussed in this Article is how the rule of mistakes(重大误解规则)in the Contract Law of the People’s Republic of China should be interpreted.Chapter 1 of the article is a comprehensive restatement of the currently binding rule of mistakes in China from the positive perspective, which serves as the foundation of further discussions. After an introduction of the actual situations that the judges are faced with, this article analyzes the definitions of each elements of the concept of “mistake”, based on the wording of statutes and the holdings of the Supreme People’s Court. The legal effects and the disputed theories in relation to the rule are also discussed in this chapter.Chapter 2 discusses the feasibility to transplant the German theory into China, which means to interpret the rule of mistakes in China with the German theory of “mistakes in the declaration of the will”. The discussion of this issue leads to a negative result. The German theory of mistake is will-oriented, which means whether the mistake should be relieved depends on whether the mistake emerges during the process of declaration. The origin of this theory is the attempt of Sagviny to integrate the theory of mistakes into the theory of declaration of will. But even Sagviny himself failed to insist on this position. Although the German civil code accepted this theory, many compensating institutions, exception rules and business practice have been developed inside and outside the civil code, which all aim to mitigate the effects of the will-oriented mistake theory. Based on the above analyses, the author draws the conclusion that the interests balance between the contracting parties cannot be achieved in Chinese law if the German theory were introduced to interpret the rule of mistakes in China, because the statute structure of the rules in both countries are different.Chapter 3 of the article discusses the feasibility of transplanting the German theory of “Destruction of contracting basis”. After an introduction of the origin and content of the theory, the article concludes that the transplantation is feasible. Because the institute of “Destruction of contracting basis” and the rule of mistake in the Chinese contract law are similar in terms of legal texts and value orientation.Chapter 4 of this article discusses the expected development of the interpretation theory. Concerning the relation between the rule of mistake and the rule of contract construction, the article argues that the second problem must be solved before the first one and that both rules shall play different roles in balancing the interests of the contracting parties. Concerning the meaning of the concept of “mistake”, the article concludes that the main problem of the rule of mistake is to separate the remediable mistakes from unremediable ones during the motive phase. And this problem can be solved with the theory of “Destruction of contracting basis”. Also, this theory can offer a model for the interpretation of the legal effects of the rule of mistake.The conclusion part sumarises the opinions of the whole article.