Judicial Practice Of The Liability For Fault In Concluding A Contract

The theory of "culpa in contrahendo", or the liability for fault in concluding a contract put forward by Yellin in 1861 breaks the theory of "no contract, no obligation" in traditional contract law theory, makes up for the loopholes of liability when the contract isn’t concluded and offers good protection of the parties’rights in negotiating while concluding a contract. The Contract Law promulgated in 1999 marks the adoption of culpa in contrahendo by our country’s law, but fails to avail the judicial practice due to the excessively simple and abstract articles, which results in inconsistent judgments and unduly discretion from the lack of specific stipulations.The thesis tries to find out the problems of application of culpa in contrahendo in the judicial practice through real cases and seeks for the approaches to solve such problems by studying the basic theory. The thesis contains three chapters.The first chapter concentrates on the definition of culpa in contrahendo, re-defining its concept and components by comparing the different statements of culpa in contrahendo in the educational circles, and then analyzing its characters while compared with the liability for breach of contract and the tort liability. Illustrating several cases in the judicial practice around Article 42 and Article 43 in the Contract Law, this chapter also deals with the categories of culpa in contrahendo and pays great attention to the category of performing other acts which violate the principle of good faith.The second chapter focuses on the compensations of culpa in contrahendo, maintaining that the objects of protection should include the inherent interests besides the reliance interests. This section further analyzes the widely debated range of compensations for inherent interests, affirming that the range of compensations for such interests should cover the opportunity loss rather than the non-property loss, and discusses the rules for limiting the range of compensations.The third chapter emphasizes on the improvement of the identification of culpa in contrahendo and its range of compensations, seeking the legislative and judicial approaches to solve the specific problems already mentioned in the above two chapters. Regarding the legislative approach, three points of view are presented:the establishment of independent civil liability status for culpa in contrahendo; the explicit stipulations of the concept and components of culpa in contrahendo; the range of and the identifying rules for compensations of culpa in contrahendo. And the application of culpa in contrahendo in the judicial practice is also deliberated such as the definition of reasonable reliance and opportunity loss, and the distribution of burden of proof.