Contract in My Soup: Chinese Contract Formation and Ritual Eating and Drunkenness

Abstract

Scholars and practitioners alike recognize that contract formation in today’s China requires more than an understanding of black letter law, but knowledge of cultural practices. There is much literature about the legal non-enforceability of contracts, and instead the critical importance of guanxi (relationships), mianzi (face), and interpersonal harmony. However, there is little mention about eating and drinking rituals. These rituals often are the heart of building trust and negotiating terms in China. They may not only be the formation of the contract but the foundation for performance and enforcement as well. However, often these rituals involve drunkenness, which sometimes has turned fatal for contracting parties. Binge drinking is reaching epidemic proportions in China and employers, including law firms, openly recruit persons who can drink heavily. “Ganbei” is a popular toast which means to empty one’s cup. This article explores what I call ganbei contracts, the phenomenon of eating and drinking rituals in contract formation. I first discuss current Chinese contract black letter law, then contemporary ritual eating and drinking, the ancient roots of ritual practice, and then guidelines for proper contemporary practice consonant with a rule of virtue and law. Since time immemorial, ritual eating and drinking have legal meaning in China.

Keywords: China, Chinese law, rule of law, contracts, business, offer and acceptance, negotiations, Confucius, ritual, eating, drinking, alcohol, drunkenness, rule of virtue, guanxi, harmony, trust, ganbei, baijiu, ancestor worship, Book of Rites, rule of virtue, binge drinking

JEL Classification: K12