Public Law Limitations on the Freedom of Contract – A Commentary on § 8 General Part of the Chinese Civil Code

Abstract

In § 8 of the General Part of the Chinese Civil Code (GPCC), which originated from § 8 of the General Principles of Chinese Civil Law and § 7 of the Contract Law, illegality and public morality are regulated. Compared to the German BGB, it is a special feature of § 8 GPCC that illegality and immorality are regulated in the same paragraph. This reflects the discussion in China about the relationship between prohibitive legal rules and public morality. As a principle, § 8 GPCC is specified in the field of contract law by § 52 No. 4 and 5 Contract Law. The interpretation of “law” in the sense of § 8 GPCC and § 52 No. 5 Contract Law encountered problems in the application of law. Legal theory and legal interpretations in China seek to limit the scope of legal prohibitions. In order to assess the validity of a contract, recent Chinese theory creates a flexible system comprising eight evaluative elements, e.g. the degree to which a contract has been fulfilled.