On Standard Terms And Its Regulation

The emergence of standard terms is the choice of social evolution and requirement of economic development which has deviated from the fundamental principles of traditional civil law, i.e. freedom of contract. Standard terms are endowed with unparalleled advantages in contrast to traditional ways of contracting. It has played a significant role in improving the efficiency of trading activities, saving the transaction cost and promoting the development of economy. Standard terms and contracts are widely used in society, exerting profound influence on all walks of life. While standard terms have brought convenience and efficiency to modern life, its defects cannot be ignored. The most outstanding issue is that the party would use its economic advantage to formulate unfair terms to exploiting interests of the other party. As an important development of contract law in 20th century, the legal nature of standard terms is so unique that it cannot be regulated by traditional civil law or contract theory. Thus, a crucial legal subject facing the countries in the world is to look for new ways of regulation and to make up for its deficiencies. The insurance contract is a typical standard form contract which is called "super contract of adhesion". A large amount of insurance contract disputes occurred in the judicial practice. Therefore, this thesis observes the status quo of the standard terms regulation in China’s legislation and judicial practice and analyzes the deficiencies and defects therein by means of collecting and analyzing insurance contract cases for the reference to improve the insurance standard form contract regulation. The thesis is divided into five parts as follows.The first part has reviewed the emergence and development of standard terms, and discussed the background of its emergence and the reason for its wide use. Its emergence and wide use is the key reason and an important signal for the decline of contract freedom.The second part clarifies the definition and features of standard terms. Different study perspectives and legal terms are adopted in use in different countries as to the system of standard terms. Scholars in China have translated it in different names when introducing such a system, which causes confusion and calls for clarification. So it is necessary to make a distinction between standard terms and related concepts.The third part analyzes the advantages and disadvantages of standard terms. Although standard terms have strengths in boosting the transaction efficiency, saving contracting time and cost and facilitating convenience and efficiency, its defects are not allowed for ignorance. Among them, the most outstanding issue is that the party who formulates standard terms would use its economic advantage to incorporating unfair terms into the contract to exploit interests of the other party. Therefore, how to regulate standard terms and to achieve contract justice is an important mission of modern contract law.The fourth part is the core of the thesis. Based on more than 500 civil judgments of insurance contract cases, the thesis analyzes legislative imperfections and issues in judicial practice in relation to the rule for information alert and explanation in Article 17, the rule for content control in Article 19 and the rule for term interpretation in Rule 30 of the Insurance Law.The fifth part making suggestions on the regulation of standards terms in insurance contract from the approaches to the information control regulation and reasonable expectation principle by elaborating on the advanced ideas and experience of other countries.