Legal Application On The Contract Based On An Incorrect Whereas Clause

The first chapter of this article proposes raised the core thesis of this article.First of all,this article interprets the whereas clause,which including sorting out the content,types and origin of the terms.After sorting out the interpretation rules and its disputes in the common law,and the domestic practical application of the terms,The following conclusions are drawn:The practical application of the whereas clause in China is very different from common law.Therefore,in view of the interpretation of the terms,the interpretation rules of common law cannot be directly invoked Unfortunately,the academic community has not been aware of this difference in practice and still follows the interpretation rules established by the precedent of Re Moon ex parte Dawes(1886),failing to study the significance of the terms to the interpretation of the contract in light of the actual situation in China.This raises the core thesis of this article:how should the law adjust the contract based on an incorrect whereas clause.Furthermore,the thesis can be subdivided into the following questions(1)whether the whereas clauses can constitute contractual obligations,and furthermore,whether breach of the clauses can lead to liability for breach of contract;(2)whether the contract can be voidable by the adversely affected party when the whereas clause is inconsistent with the actual performance(mistake);(3)how should the law react to adjust the contractual relationship between the parties when the incorrect terms cause the interference with the performance of the contract?The second chapter of this article focuses on interpretation of the whereas clause and application of the law in China.Any legal provision or contract clause must be interpreted to clarify its meaning.Therefore,in view of the fact that the clause constitutes specific subsidy obligations or ancillary obligations,it can also trigger liability for breach of contract.When there is an inconsistency between the recital and the actual performance,the mistake occurs.When the actual performance is severely deviated from the recital and the adversely affected party is unwilling to continue to perform the contract,the situation may be interpreted as either a breach of contract by the party or the wrong motivation of both parties.The two different legal consequences of assuming liability for breach of contract and avoidance of the contract may result in a huge difference in risk allocation between the two parties.On the contrary,judicial practice consciously seeks balance in individual cases,and the judgment ideas of "recognizing breach of contract while reducing liability for breach of contract" or "denying one party for breach of contract while requiring him to share part of the loss" are not uncommon.The third chapter of this article focuses on the question of whether the contract based on a incorrect whereas clause can be void.The contract is an external expression of intention of the parties.The mistake of the whereas clauses are closely related with the mistake about motivation,which raises the question of whether a contract based on a mutual wrong motive can be void.Concerning material misunderstanding rules,there are theoretical disputes over "monism" and "dualism"about the mistake rule.By systematic organization of American law and German law,this article argued that although the common law does not distinguish mistake about content from motivation in the same way that German law does,it distinguishes between mistake about fact and mistake about prediction in view of the division of risks.It makes no difference between American law and German law in essence.In the meanwhile,the American law regulates the division of contract risk through the consideration theory and supplementary explanation of the "implied conditions".This method has many similarities with the basis of the transaction or the theory of extended factual errors of German law.According to this,the formal division of"monism" and "dualism" has no practical significance.This article believes that a contract concluded on the basis of the incorrect whereas clause does not apply the material misunderstanding rule.Thereof,by referring to the German law,the interpretation of the "The basic conditions of the contract" mentioned in Article 533 of the "Civil Code(Draft)" can be expanded to include the subjective transaction basis in its meaning.Article 533 can serve as "a basket of outsourced error law" to solve the problem of performance of the obligation in a unified way.The fourth chapter of this article is based on the conclusion of the third chapter,and focuses on how to adjust a contract based on a incorrect whereas clause in our country.This article believes that Article 533 of the "Civil Code(Draft)" is the main legal norm,and the "basic conditions of the contract" should include the basis of subjective transactions.At the same time,"the frustration of the purpose of the contract" can be used as a criterion for judging major changes.From the perspective of legal comparison,the possible interpretation of Article 533 of the Civil Code(Draft)is systematically combed.It can be concluded that though the whereas clause may constitute basic conditions of the contract,when interpreting and applying Article 533,attention should be paid to the risk allocation of the contract itself and typical transaction risks,the impact of the consideration of the contract and the blameability of both parties to the contract,all of which can be combined to judging the applicability of 533.In view of the fact that the mistakes in the clauses should not distinguish between mistake about fact and mistake about prediction,there are on differences in the application of the law.However,in terms of foreseeability,there is a difference between mutual mistake about motivation and the change of objective circumstances.From the perspective of maintaining the autonomy of the will,the legal adjustment to the contract based on an incorrect whereas clause can be lower than the principle of change of circumstances in the standard of the application of law,and the "obviously unfair" requirement can be appropriately reduced.