Analysis On Precontract's Legal Effectiveness And Liabilities For Breach Of It

Precontract is a contract in which relevant parties agree to enter into another contract within a certain period of time in the future.With the development of social economy,precontracts have been widely used in trading activities.The main purposes of precontracts are guarantee trading opportunities and make people trade more carefully.An important judicial interpretation was announced by the Supreme people's court of China on May 10,2012,the Supreme people's court's judicial interpretation on legal applying issues of how to judge disputes on sale contracts,(the judicial interpretation on sale contracts).It is the first clear legal provision on precontract,before that we have no clear legal provisions on precontract in our country.The announcement of it provided people legal bases to use precontracts and handle relevant disputes.But it still has some limitations,it's provisions are somewhat broad,and has no specific provisions for the precontract system,for example,it has no specific provisions on the meaning,legal effectiveness and breach of precontract and so on.So,further improvements on the precontract system are needed at the legislative level and further discussions and studies are needed on the precontract system in theory too.This paper is divided into three parts:The first chapter,the identification of precontract.Firstly,clarify the definition of precontract——precontract is a contract in which relevant parties agree to enter into another contract within a certain period of time in the future.And then,analyze the legal characteristics of precontract:firstly,precontract is an independent creditor's rights contract;secondly,precontract is consensualcontract;thirdly,the subject of precontract is to enter into another contract(this is the biggest feature of precontract);fourthly,precontract has time limit.Precontract has similarities with it's target contract in practice,but they have many differences such as purposes,contents,rights of claim,the liabilities for breach of contract,and so on.There are some similarities between letter of intent and precontract,but they are different in nature,content,effectiveness and remedies for breach of contract.The logical distinctions between contract with terms or conditions and precontract are clear,but in some real cases they maybe very similar and need to be distinguished.Chapter II,the legal effectiveness of precontract.This chapter specifically discusses the legal effectiveness of precontract.The theoretical bases of the precontract system includes: freedom of contract,good faith,promissory estoppel and economice ffectiveness.Then,analyze several doctrines on the theory of precontract—— "must be negotiated," "should be reached","content decided","as the target contract" and so on,and analyze their pros and cons.I think,the study on the effectiveness of precontract should take both subjective and objective factors of precontract into account,particularly on the premise of fully exploring people's real meaning,and then combine with wether the necessary terms of target contract are included in the specific contents of precontract or not,to discuss the effectiveness of precontract.Chapter III,liabilities for breach of precontract.Precontract is a contract,breach of precontract should bear the responsibilities of breach of a contract.This chapter first discusses the connections and differences between the liabilities for breach of precontract and the liabilities of contract,they are similar and competing,but different.On the basis of the analysis of the effectiveness of precontract,the author makes a classified discussion on the breach of precontract on the basis of the analysis of efficacy of precontact.Finally,discusses the penalty and deposit in precontract.