III. Liabilities in Contract Law
　
　
　The liabilitiesin contract law refers mainly topre-contractual obligation, liability for breach of contract andpost-contractual obligation
　　　　This extension of liabilities results in parties being burdened by all threekinds of obligations. However, this extension in Chinese law of contract isinevitable in the face of rapid development, leading to the adoption of thesystem and regulations which are used by many other countries in the world.
　
　
　A. The extension of contractual obligations
　　　　
　
　In traditional theory relating tocontract law, the responsibility taken on by the parties is solely thatstipulated by the parties (also known as the obligation to pay). However, inmodern times, the emphasis has shifted to the realization of obligatory rights.In order to ensure this, contractualobligation is no longer restricted to whathas beenagreed upon in the contract as it now includes incidental obligation. Thisobligation is based on honesty and regular course of dealing, which requiresparties to do the necessary preparations to ensure the realization ofobligatory rights. Care must be taken too, to ensure protection of one’s rightssuch as body, health and wealth throughout the whole contractual process. Byincorporating such theories, regulations regarding intentional obligations,such as the requirements of notice, aid and confidentiality are introduced intoChinese contract law
　　　　Regulations pertaining to pre-contractual
　　　　nd post-contractual obligations
　　　　re also introduced, thereby extending the scopes of Chinese contract law.
　
　1.Pre-contractualObligation
　
　From thetraditional view of civil law, parties will only take on obligations after theconclusion of the contract. This is so even if parties have startednegotiating. It is thought that if obligations are imposed while negotiating,it will severely interfere the freedom of negotiation. However, the modernapproach in civil law is that even if the contract is not concluded, there isstill an existing obligation if mutual reliance between the parties springsfrom mutual interaction and negotiation. Pre-contractual obligation comes aboutat the stage of negotiation, whereby one party causes the other to be relianton it and as a result suffer damages (whether intentionally or negligently).The former will be liable for the damages caused and the negligence in themaking of the contract
　　　　
　
　The liability for contractual negligencein the making of the contract is based upon pre-contractual obligation which isin turn derived from the principles of honesty and trust. According to thetraditional approach, prior to this negligence, a party can only make use ofthe law of infringement and not the law of contract. However, the contractualrelationship is one that is based on trust, and this legal relationship betweenthe parties arises when the parties concerned enter into negotiations with theintention of making a contract. When this happens, the relationship changesfrom an ordinary to a special one, and as a result, a special trustrelationship is formed. The nature and strength of this kind of relationshipgoes further than most obligations required in tort law and is relativelycloser to that of contract.
　
　The conditions constituting liability for negligencein making a contract are: When the parties liaise with each other with theintention of entering into a contract and one party violates thepre-contractual obligations, the liability of the occurrence of damages will beattributed to the party who violates the pre- contractual obligations.Furthermore, Chinese law does not require the opposite party to be non-negligent. If the opposite party is also negligent in the occurrence of damage,then “each will bear the corresponding liability”.
　
　On the question of liability for negligence in makinga contract and the liability to compensate for damages, it is quitecontroversial that the injured party may request that the performance interestor reliance interest be used. The commonly held view is that the damages fornegligence in making the contract is based on the principle of relianceinterest, while the damages for performance interest is not recognized. As towhether the damages for reliance interest can exceed that based on the principleof performance interest, there are views saying no
　　　　nd views that say yes.
　　　　ith regards to damages for reliance interest, some academics claim that therule of foreseeability can be suitably used to limit such damages.
　　　　
　
　
　2.Post-ContractualLiability
　
　Post-contractual liability is theliability arising from the violation ofpost- contractual obligations refers to certain obligations with regards to anact or omission when the contract has ended, that the parties will still bearin special circumstances, in accordance to the principle of good faith. This isto preserve the personal and proprietary interests of the opposite party and ifin violating the said obligations one should bear the corresponding liability.After the contract has ended, it is not as though the parties no longer haveany relationship. The parties should abide by the principle of good faith andcarry out the obligations of notification, providing assistance andconfidentiality, etc. in accordance to the customary practice.
　　　　f one has obtained the other party’s technical secrets, marketing channelsetc. through the contractual relationship, it should be kept confidential.After the termination of an employment contract, when one party goes to workfor the competitor of the original unit, he should not use the technicalsecrets etc. of the original unit on his own accord. Another example is thatwhen there are technical problems in the operation of the supplied machinefacilities, the supplier should provide the buyer with technical support andassist in overcoming difficulties. These are the requirements of the principleof good faith.
　
　Post-contractual liability is a form of contractualliability that was not provided for in the previous three separate law ofcontract. Contract Law only stipulates post-contractual obligations, but doesnot provide for post-contractual liabilities. Article 92 of the Contract Lawstipulates:“When the rights and obligations of the contract has been ended, theparties should abide by the principle of good faith and carry out theobligations of notification, providing assistance, confidentiality, etc. inaccordance to the customary practice.” However, after this section, there is nocorresponding section on the liability for violating post- contractual obligations.This is a gap in enacting the law. However, one should not infer from this andconclude that the Chinese law does not include post-contractual liability aspart of contractual liability. First, stipulating obligations imply that thereis liability. It should also be understood that in not performing the post-contractual obligations, one would incur post-contractual liability. Second, inproviding for a section on “Liability for the breach of contract” in Part 7,after stipulating post-contractual obligations in Part 6, it should beunderstood that the sections on liability for the breach of contract can beused to regulate the behaviour for violating post-contractual obligations.Therefore, it is justifiable to treat post- contractual liability as constitutingpart of the liability for contracts in China.
　
　The main elements constituting post-contractualliability, from the time it occurs, should be such that when the performance ofthe contract has ended, one party did not carry out the obligations ofnotification, providing assistance, confidentiality, etc, and the aforesaidconduct causes damage to the other party, and there is a causal link betweenthe behaviour and the resulting damage. Furthermore, to constitutepost-contractual liability, the wrong-doer must be objectively at fault. Therecan be no compensationsif there isno fault. Of course, in proving that the party is at fault, fault deductionshould be used. If the wrong-doer is asked to prove that there is fault, it ismost likely that there will be no fault.
　
　
　B. The Principle of Attributing Liability in theBreach of a Contract
　
　With regards to the principle of attributingliability in contract liability in China, before the enactment of Contract Law,there are the following three views in the Chinese academe :
　　　　
　
　First, the principle of attributing contractualliability is based on the principle of fault liability. This view of monism ofthe principle of attributing contractual liability is widely acknowledged bythe academe. The obligor is at fault for not carrying out his obligations andthis is a pre- requisite condition for bearing liability for the breach ofcontract.
　　　　Due tothe special nature of contractual liability, the monism of the principle ofattributing liability and the principle of fault liability in contractualliability is the principle of fault deduction.

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