Article 7
– civil activities shall observe the social ethics and shall not harm the public interest and undermine the state economic plans or disturb the social economic order.
– Special effective element
Registration (758)
Subject Matter of Contract
1. The subject matter shall be legal.
A. Shall not violated the mandatory laws(71)
– In order to maintain social order, ethics, and justice, the state may intrude private relationship by setting out a mandatory laws.
The category of laws by its function
Article 6 and 7 0f PRC GPCL
Article 6
– Civil activities shall be in compliance with the laws; where there are no relevant provisions in the law, they shall be in compliance with state policies.
Article 7 of PRC Contract Law
In concluding or performing a contract, the parties shall comply with laws and administrative regulations and observe social morals, and shall not disturb the social and economic order or harm the public interests.
Discretionary rule – Supplemental rule ﹝320、346、369﹞ – Interpretation rule﹝4、370﹞ Mandatory rule – Imperative rule﹝27I、47、760、972、1049﹞ – Prohibitive rule ﹝16、17、222、757﹞
Contract Formed
– valid – avoidable – Uncertain (indefinite) – void
Contract Not formed：invalid
Effective elements of Juristic Act
– General effective element
247)
4. The subject matter shall be certain.
Juristic act and the state law
Autonomous in private life: an individual can create or form a private legal relationship under his/her willingness. Juristic act under private autonomy:
2. The subject matter shall be proper
a.
Shall not violate public policy and good moral
(72)
b.
Shall not be unconscionable (74, 274-1)
3. The subject matter shall be possible (246,
Article 52 of PRC Contract Law
A contract is void in any of the following circumstances:
– (i) One party induced conclusion of the contract through fraud or duress, thereby harming the interests of the state;
– Making decision by his/her self and taking responsibility by his/her own.
– The state protects and preserves the accomplishment of private autonomy.
– The parties can exclude laws if the law exists as a instrument of supplement or interpretation to private intention.
The party shall have capacity to make a juristic act﹝RCC 75-85、981﹞ Subject matter shall be legal and shall not violate mandatory laws (71), public policy(72), and justice (74) Declaration of intention shall be complete and no any defectegories of Effectiveness Illegality Mental Reservation Malicious Collusion
Effectiveness of Contract (juristic act)
Category of effect