The Impact of the Recently Issued Judicial Interpretation of China’s Contract Law 1999: Creating Certainty for All?
Nottingham University Business School
August 26, 2009
2nd Annual Conference of the International Forum for Contemporary Chinese Studies (IFCCS), September 2009
China passed a uniform contract law ten years ago in 1999, recognising the central importance of contract law for a market economy to operate effectively, as contracts lie at the heart of all business transactions. However, both the economy and legal system in China have undergone significant changes over the past decade and as a result the Supreme People’s Court issued a new judicial interpretation of the Contract Law on May 13th 2009 which aims to clarify the 1999 law. This judicial interpretation deals with crucial issues such as the validity, performance and breach of contracts and will arguably lead to increased certainty in the trading environment as enterprises can feel more secure of the outcome of any potential contract dispute. Therefore, this paper will focus on these key questions: to what extent does the new interpretation modify or improve the existing law? To what extent does the new interpretation reflect a changing commercial climate in China as the economy continues to react to the global downturn? What will the impact be for businesses operating in China? By addressing these issues, this paper will offer a clear overview of the current state of contract law in China and how businesses can use the law most effectively.
Number of Pages in PDF File: 13
Keywords: China, contract law, judicial interpretation
Date posted: August 27, 2009