Study On The Foreseeable Rule In The Contract Compensation

The foreseeable rule began in the doctrine of French scholar Pothier,but it flourished in the Anglo-American legal systems. Contract Law ofChina mainly inherited common law, but the abstract provisions can notexpress the complex foreseeable rule. When I was in contact with theforeseeable rule, I felt that the discretion is too large, which maynot be conducive to the unity and stability of the law. And most doctrineof the foreseeable rule stops at the theoretical construct, and it doesnot involve judicial application, which increases the difficulty of itsapplication in practice. Only you apply the law, it will be alive. Inthis thesis, from the general theory of the foreseeable rule, I willexplore the specific structure of it in the breach of contract damages,explore its essence and specific factors that to be considered in theapplication of the foreseeable rule. Do some research On the Article113of China’s "Contract Law".Chapter I, this paper outlines the historical development offoreseeable rule, elaborated confusion on foreseeable rule with relatedquestions. Chapter II, discusses basis of justification on foreseeable rule.Different theories at different perspectives have revealed foreseeablerule on different functions and roles. Foreseeable rule are implied bythe parties on risk management, which is the basis of justification.Theory of Justice has pointed out that compensation for indirect lossesborne by parties may be too heavy, and there’s a rule needed to balancethe distribution of compensation and benefits. Theory of Efficiency,foreseeable rule prompted the parties to disclose information, reducingits strategy behavior, improving efficiency, and helping to optimizethe allocation of resources. Fairly foreseeable rule and causation havecurbed the unlimited extension of the fact of causation, and its objectiveis to limit liability. The reference value of causality is constitutedto discuss the value of foreseeable rule of composition, and thus thedetermine factors of nature and impact of foreseeable rule.Chapter III, analysis the theoretical construct of foreseeable rule,which is the most discussed part by scholars, and also the last pieceon research of the foreseeable rule. According to comparative analysisof the various theories, it is believed that the subject of foreseeablerule may only be applied to the defaulting party as following: foreseeabletime is when the contract is signed, and foreseeable content consistsonly the type of damage foreseen. However some special industries mayrequire the defaulting party to foresee the detail of degree or amounton certain damage. Moreover, foreseeable standards should be judged bymeans of the reasonable person.Chapter IV, analysis the foreseeable nature of the rule, criticizedthe abuse on using foreseeable factors. There appeared to bemisunderstanding on the term “foreseeable”, which indeed is the essenceof risk allocation made by the parties in accordance with existingknowledge. Whether foreseeable or not may be an important factor for the parties on risk management; however it does not mean that the partieshave accepted foreseeable risks.Chapter V, some a variety of factors of using foreseeable rule needto be considered in order to broaden the horizons of judgment, to enhancejudicial norms and operability, to ensure discretion stability predictiveequilibrium from judges.Chapter VI, from the comparative law analysis, it is suggested toamend the rule of foreseeable in China laws, through the limitation ofequitable principles to eliminate the application of foreseeable ruleon intentional and gross negligence.