Research On Special Regulations On Standard Terms Between Businesses

The paper mainly explores whether the standard terms between businesses need to be specially regulated and how to be specially regulated. Standard terms are provisions which are prepared in advance for general and repeated use by one party and which are actually used without individual negotiation. In reality, the party supplying terms tend to set out distinctively unfair contracts terms. Therefore, it is necessary to formulate special regulations on its conclusion, interpretation and validity. The paper argues that the purposes of the regulations on standard terms are to protect vulnerable groups from the harm of unfair contracts. However, businesses, compared to consumers, are still in line with rational people to a large extent, and thus are capable of protecting themselves. Further, businesses pay more attention to efficiency and therefore bear the higher duty of care, and demand broader autonomy space. Therefore, not only the fairness, but also the efficiency of transactions and the necessity to limit the autonomy between merchants need to be taken into account in formulating the special regulations on merchants’contacts.In terms of incorporation of standard terms in contracts between businesses, because of the merchants’higher capacity and their characteristic of rationality, this paper argues that a distinction should be set out between the rules of commercial standard terms and consumer contracts. In determining whether general standard terms are incorporated into commercial contracts, providers of standard clauses do not have the obligation of positive reminding or explanation. Based on the particularity of commercial transactions, standard terms can be incorporated into the contract, express or implied, or be incorporated into for a course of dealing, common knowledge or business practices. When it comes to surprising clauses, subjective standard should be adopted. Also, the experience, the frequency of transactions and other facts should be taken into account when deciding whether the content of standard terms can be reasonably predicted by a rational business.When it comes to rules of interpretation between merchants, the paper claims the grounds of it is that standard terms, compared to the provisions individually negotiated, are prepared in advance and entered into without negotiation with the other party. And in the contracts between the merchants and the contracts between businesses and consumers, these factors also exist. As a result, there is need to set out special regulations on the interpretation of the terms in contacts between merchants, and the rules of interpretation of standard clauses in contracts between businesses and consumers should be applied.When it comes to the validity of standard clauses between businesses, this paper firstly clearly clarities the regulations, legislative techniques, legal basis and legal concepts of the Germany, the United States and Taiwan of China. After that, the paper argues the rules of standard contracts between businesses in China’s mainland can be drawn out from laws of foreign countries. Secondly, after discussing the legal basis for the regulation of the contents of standard clauses, the paper believes not only the freedom of contract of the clauses’ providers should be taken into account, but also the freedom of the other party should be considered. Otherwise, the freedom of contract may be employed by terms’ providers to deprive other parties of their freedom and be employed to do harm to interests of other parties. Therefore, in order to balance the interests of both parties in contracts between businesses, standard clauses are invalid only when the following conditions are satisfied:the process is not fair and the content is unfair. In order to facilitate judges to balance different interests in cases, the General provisions, not "black" or "grey list", should be adopted in area of contracts between merchants. Finally, based on comparative jurisprudence and practice of regulations of standard terms in China, the paper devises the general provision of content control in contracts between merchants and the provisions of burden of proof, which would facilitate efficiency and the order of commercial trade.