The Identification Of Unconscionability In Chinese Concract Law

Unconscionable Contract Rule is the supplement to the principle of freedom of contract, the purpose of the rule is to correct injustices under the principle of freedom of contract in order to maintain the justice of contract, which is important to the relatively weak party in the contract. In China, the injured party has the right to cancel the contract which is unconscionable. This article is about to discuss the identification of unconscionable contracts. Although Chinese Contract Law has a special provision about Unconscionable Contract Rule, but there are no detailed provisions or judicial interpretation about the identification of it. Scholars’ opinions about Unconscionable Contract Rule are different, the debate still exists. As the provision of Chinese Contract Law is not clear, the judicial practice in handling the cases concerning unfair contracts is relatively in chaos. There is no unified standard about the identification of unconscionable contracts. In order to solve these problems above, this article will analyze the provision of law, judicial interpretations, academic views, and judicial cases concerning Unconscionable Contract Rule, and draw lessons from foreign experience in the relative legislation. Finally, this article will some suggestions on the improvement of Unconscionable Contract Rule in China.This first chapter of this article is about to show the Unconscionable Contract Rule in Chinese Law. The Chinese Civil Law, including the contract law, only provide the principle of identification of the unconscionable contracts, no detailed regulations. This situation makes the definition of unconscionable contracts, the applicative scope of Unconscionable Contract Rule, the constitutive requirements of unconscionable contracts and the legal consequence in mess. The judge is facing a lot of difficulties in identifying unconscionable contracts.The second chapter of this article is about to analyze historical origin and the foreign legislative models relating to Unconscionable Contract Rule. The “Very Loss Rule” of Roman law is the earliest form of Unconscionable Contract Rule in Continental Law System, it focuses on the real expression of the contractual parties. The “Contract Damage Rule” in France was inherited from the “Very Loss Rule” of Roman law, it means the party who suffered unreasonable loss has the right to cancel the unfair contract. The “Excessive Profiting Rule” in Germany adds the subjective factors of the parties to the constitutive requirements of unconscionable contracts. The American Unconscionable Contract Rule involves procedural and substantial factors, and detailed regulations are relatively more practical.The third chapter of this article is about to analyze the problem of identification of unconscionable contracts in China. Firstly, according to the position of the provision of Unconscionable Contract Rule in Chinese Contract Law, this rule should be regarded as a type of defect expression rules. Secondly, the Chinese scholars’ views about the constitutive requirements of unconscionable contracts are divided into two theories, the “single requirement” theory and the “double requirements” theory. Finally, by discussing two specific cases in the judicial practice in China, it seems that the “double requirements” theory is much more reasonable in the identification of unconscionable contracts.The last chapter of this article gives some suggestions about improving the Unconscionable Contract Rule. Firstly, the Unconscionable Contract Rule in China should include the “Vulnerability Rule”, so as to be similar to the “Excessive Profiting Rule” in Germany. Secondly, the “double requirements” theory should be taken as the reasonable way in the identification of unconscionable contracts. Finally, in the concrete identification of unconscionable contracts, the price terms normally should be considered in priority, and other important terms should be compared with general standards and business practices. The court should consider the background of the contractual parties, the process of concluding the contract and other evidences that submitted by the contractual parties when deciding the contract to be unconscionable contracts. In addition, the court should also consider the identity of the contractual parties. When refer to natural persons, the identification of unconscionable contracts should be more focused on substantial factors; when refer to legal persons, the identification of unconscionable contracts should be more focused on procedural factors.