Study On Effectiveness Of Contract Pending Approval

Contracts pending approval refer to certain specific transaction areas,which do not take effect immediately after the establishment of the contract,but are subject to approval by the administrative authorities.With regard to the legal consequences of such contracts,the provisions of Article 44(2)of the Contract Law are clearly insufficient.Subsequently,relevant judicial interpretations made further provisions on the validity of the contract and the consequences of violations,and the Jiu Min Minutes,issued in 2019,explained the validity of the contract and the obligation to submit approval in more detail.Nevertheless,there are still many theoretical disputes about pending contracts,such as how binding is the status of "ineffective" ? How effective is the reporting obligation? What is the scope of the liability for damages borne by the subject that violates the obligation to report? Can I cancel a contract that does not take effect? These issues need to be further reasoned.This article analyzes the problems in the disputes of approval contracts from three aspects.The first chapter discusses the legitimacy of public power's involvement in the subject of private law.Administrative approval is an administrative license in nature,and its purpose is to temporarily ban certain exchanges.This is different from the legislative purpose of Article 52 of the Contract Law.The latter is an absolute prohibition of certain acts,while the former still has the possibility of taking effect but it is more sensitive in specific transaction areas.Whether the subject of a specific transaction or the transaction result is in the public interest needs to be controlled by the administrative authority.This kind of control,from the interpretation of Article 44(2)of the Contract Law,should be considered as adding an effective element to this type of transaction contract,rather than just controlling the performance after signing the contract.Judging from the legislative attitude towards the examination and approval of contracts,the obligation to apply for approval is the focus of the whole issue,and disputes often occur here.The second chapter focuses on the validity of the pending contract,including the contract body and the approval clauses.The validity of the pending contract has gone through the four theories of invalidity,non-effectiveness,validity,and partial validity,and partial non-efficiency.Partial validity and partial non-efficiency should be the most appropriate theory,and overcome the shortcomings of other theories.No matter what perspectives are taken on the effectiveness of the approval contract,it does not affect the independent entry into force of the approval clauses,but it is more logical to distinguish between the contracts to be approved and the approval clauses and the main payment obligations.Although the main payment obligation has not yet taken effect,it also has formal binding force,which is manifested in that the parties to the contract must not arbitrarily cancel,change or terminate the contract.The approval clause has dual legal attributes,one is the positive obligation of requiring the obligor to start the approval process,and the other is the premise of the binding force of the contract form to be approvedThe third chapter mainly discusses the legal consequences of violating the obligation to submit approval.According to the source,the obligation to apply for approval can be divided into the agreed obligation for approval and the statutory obligation for approval.Under China's current laws,the nature of the responsibility for violating the obligation must be distinguished.Legislation is particularly concerned about the consequences of breaching the obligation to report and approve,including the scope of damages,continued performance issues,and dissolution issues.For the purpose of the approval clause,the scope of compensation should include performance benefits,but this is based on the premise that the contract may become effective after approval.For the cancellation of the pending contract,you can start with the dual attributes of the approval clause,or you can directly admit that the ineffective contract can be cancelled,no matter which way is not contrary to the current theory.