econd, the principle of the objective attribution of liability and theprinciple of non-fault liability, and not the principle of fault liability,should be used for contractual liability. As long as the obligor violates theobligations that was agreed upon in the contract, it does not matter whetherthere is objectively no fault. He still has to bear the civil liability.
　　　　hird, contractual liability and the principle of attributing liability shouldbe based on dualism, and not on a single principle of attributing liability.Other than the dual principles of attributing liability in contractualliability and the principles of fault and non-fault liability, the contract lawin China also has an existing system of the dual implementation of theprinciples of fault and non-fault liability.
　　　　owever, there are different opinions on the limits of the principles of faultand non-fault liability when they each adjust.
　　　　
　
　After the enactment of Contract Law, academe feltthat Contract Law stipulates non-fault liability and strict liability.
　　　　trict liability has obvious and easily identifiable advantages.
　　　　irstly, the plaintiff need only prove to the court the fact that the defendantdid not carry out his contractual obligations. The plaintiff is not required toprove that the defendant was at fault. Strict liability also does not requirethe defendant to prove that he was not at fault for not performing. Thus, thedifficulty of proving whether there is fault is done away with and judgment isalso facilitated. It is also beneficial to the litigations . Secondly, there isa direct relationship between the liability of non- performance and breach ofcontract as there is a causal link between the both of them. Strict liabilityhelps in ensuring that the parties treat the contract seriously and it alsoadds to the gravity of the contract. The tendency of the party in breach to tryand argue that that there was no fault, hoping to escape liability and to avoidbeing under the principle of fault liability helps in strengthening the spiritof responsibility and the legal awareness of the parties.
　　　　Contractual liability is used as an important measure to guarantee therealization of the obligations and the performance of the liabilities. The maineffectiveness lies in its compensatory nature and that the assured obligee canget or may get compensation from the obligor’s property for all the damagesincurred as a result of the non- performance of the liability. At the sametime, contractual liability also has the function of guarding againstnon–performance of liability. There is no doubt that replacing the originalresulting liability with the principle of fault liability is an improvement. However,its effectiveness is not complete. The biggest shortcoming in contract law isthat it provides the contract breaker with relatively more opportunities toescape liability and it makes it more difficult for the obligee to obtainrelief. The principle of strict liability gets rid of the main elements offault, limits the ground of pleading and makes it easier to establishliability. From this, the obligee can obtain relief and it also maximizes theembodiment of the compensatory function of contractual liability. Furthermore,strict liability is more satisfactory to the innate quality of liability forthe breach of contract. There is a difference in the inherent quality ofliability for infringement and liability for breach of contract. The logic forabiding by the former is that since the conflict of rights commonly exists, theoccurrence of damage is unavoidable. The law in requiring the person whoseconduct was infringing to bear the liability, and the occurrence of the damageshould not be the pre- condition. The attribution of liability is such thatthere should be reasons other than the fact that there was damage. Theattribution of liability is fault. Due to the existence of fault, it makespursuing most infringement liability more reasonable and persuasive. Liabilityfor the breach of contract is different as it arises from contractualobligations. The innate quality is that it comes from the agreement of bothparties and is not imposed by law. The law upholds the binding force of thecontract, pursuing the liability for breach of contract when there is non-performance, but it is only carrying out the intention of the parties.Therefore, liability for breach of contract is relatively stricter, and shouldbe stricter than most liability for infringement.
　
　Fault does not constitute the main element in orderto establish strict liability. One should bear the liability for violating acontract. Comparing that liability with fault liability in such a situation, itis very strict, but this does not mean that there is no possibility of anyexemptions from liability under the system of strict liability. Even if it is astrict liability, it is not absolute and there are possibilities of exceptionsof the liability. The possibility of this kind of exceptions refers to that ifthe defendant proves the grounds for the exoneration from liability. Under thesystem of strict liability, force majeureis a direct stipulation of the ground for an exemption from liability. Once youprove that there is force majeure,you are exempted from liability. However, under the system of fault deductionor fault liability, force majeure isused as evidence for proving that one party has no fault. Once you prove force majeure under the system of strictliability, you will be exempted from liability because it is stipulated as anexception to strict liability by the law. Forcemajeure is the same under the two systems, the only difference is in thetechnique of applying it. Under the system of strict liability, if the partieshave stipulated an exemption clause and agreed on a clause that limitsliability, in principle, these clauses are still valid. In reality, there isnot much difference between strict liability and fault deduction liability.Strict liability is however, not equivalent to absolute non- fault liability.
　
　ConclusionFrom the time the decision of theNational People’s Congress to begin enacting a uniform law of contract forChina in October 1993 was made to the time of enactment of the contract law,the time taken was six years. The draft of the Contract Law differs from theprevious enactments of other laws in that it fully utilized the functions ofthe academics. The academics actively participated in the drafting exercise ofthis Contract Law. Furthermore, judges also participated in this legislativeexercise of the law of contract. Therefore, Contract Law not only reflects thestandard of research and theories in China’s contract law, it has absorbed anddrawn reference from the principles and systems of market economy’s commonpractices. It is also a reflection that China’s judicial practice has arelatively adaptable nature. The general principles of Contract Law are theessence of contract law and have an important status in contract law. Thegeneral principles of Contract Law stipulates the basic principles and thebasic systems of the formation and taking effect of contract, the performanceof the contract, the liability of the contract, etc. Before unifying thecontract law, China’s enactment of contract laws and judicial practice did notseparate the systems of formation and taking effect of the contract. It shouldbe an improvement that the Contract Law separates the systems of formation andtaking effect of the contract. Looking at comprehensive problems of a contract,the system of the right of rescission and the right of subrogation may providea system of security for the obligee to realise his obligatory rights and italso sets the foundation for the system of a good market order. During theperformance of the contract, there are all sorts of regimes for the rights todemur, it covers the different stages of the performance of the contract as awhole, balancing the relationship in the interests between the parties,embodying the rationale of fairness and justice in law. The development ofliability in contract law also reflects the legalisation of moral principles.It does not matter if it is pre-contractual liability or post-contractualliability; all it embodies is the principle of good faith in contract law. Theprinciple of attributing liability in contractual liability reflects the commontrend in the development of contract law in this area.
　
　However, the law of contract in China has not reacheda level of perfection. Like the general principles of contract law, all kindsof problems still exist, and it awaits further research in academic theory andjudicial practice to supplement and bring it to a higher level.
　
【注释】

hengyunrui， S. J. D., Associate Professor of Law,East China University of Law & Politics.

The Economic Contract Law was promulgated on the13th of December, 1981, came into effect on the 1st ofJuly, 1982, and on 9th September 1993, the Bill of Amendment waspassed by the Legislature.

See Guiguo Wang, Wang’s Business Law of China, Butterworths Asia, (1999, 3rded) at page 45.

The Foreign Economic Contract Law waspromulgated on the 21st of March, 1985, and came into effect on the1st of July in the same year.

The Technology Contract law was promulgated onthe 23rd of June, 1987, and came into effect on the 1st of Novemberin the same year.

The three contract law regulates different subjects. The Economic Contract Lawapplies to contracts concluded between Chinese legal persons, while the Foreign Economic Contract Law applies tocontracts between Chinese legal persons and foreign legal persons,organisations or individuals. The Technology Contract Law applies to contractsthat involve the object of technologicaldevelopment, transfer, information, and service as between Chinese legalpersons, between Chinese legal persons and individuals, and betweenindividuals. However, technology contracts signed between foreign legalpersons, other organizations or individuals and Chinese parties are governed byregulations of the Foreign Economic Contract Law instead of those of theTechnology Contract Law.


The Contract Law comprises of 3 parts: thegeneral principles, specific provisions and supplementary provisions. It totals428 articles. The law declares the abolishment of the Economic Contract Law,the Foreign Economic Contract Law and the Technology Contract Law. It ended thephrase of coexistence between the 3 former contract laws and unified thecontract law regulations.

On the 1st of December, 1999, duringthe 1090th meeting of the Supreme People’s Court Tribunal, theContract Law Construction (Legal Interpretation No. 19) was passed. Thelegal construction was put in force by a proclamation on the 29thDecember, 1999. It contains seven parts and total 30 provisions. It mainly regulatesthe sphere of applicability of contract law, limitation of actions andeffectiveness of contracts. The two kinds of rights: the right of subrogationand the right to rescind serve as measures to protect obligee rights.

See also Zhao Xu Dong, Lun He Tong De Fa Lu Yue Shu Li Ji He Tong De Cheng Li Yu Sheng Xiao:Discussion On the Legal Binding Force And Effectiveness Of Contracts And theFormation And Taking Effect Of Contracts, Chinese Law 2000, Vol. 1.

Article 13, Contract Law

Wang Jia Fu (Main Editor), Zhong Guo Min Fa Xue · Min Fa Zhai Quan:Chinese Civil Law Study · Civil LawCreditor Rights, Law Press, 1991, at page 314.

Shi Shang Kuan, Min Fa Zong Lun: Civil Law Pandect, China University of Politicsand Law Press, 2000, at page 324.

Article 55, General Principles of CivilLaw

Supra,note 26, Shi Shang Kuan, at page 326-34.

Article 44 of Contract Law states, “According tothe abovementioned regulation, law and administrative regulations should handletaking effect procedures relating to approval and registration.”

Article 9, Construction of Contract Law

See also Xie Huai Shi et. el., Hetong Fa Yuanli: Principles of Contract Law , Law Press, 2000, at page 143.

Article 68 and 69, Contract Law

Article 67, Contract Law

Article 110, Contract Law

For a detailed discussion on the issue ofpreservation of contract: see also Wang Li Ming, Cui Jian Yuan; Hetong Fa Xinlun · Zongze: New Theory on Contract Law · General Rules,China University of Politics and Law Press, December 1996 ed., at page 375 –402.

In the Supreme People’s Court, Guanyu Shiyong (Zhonghua Renmin Gonghe GuoMinshi Susong Fa) Ruogan Wenti De Yijian: Concerning the Application of ThePeople’s Republic of Chian’s Civil Procedural Law – Questions and Opinionas stipulated in article 300, is the theory of basic compliance to theobligee’s right of subrogation but the major limitation of the provision liesin the fact that its usage is confined merely to the enforcement process ofcivil litigation, causing its legal functionality to be severely compromised.As such, the significance of the system of an obligee’s rights of subrogationis certainly not absolute or complete.

When the Supreme People’s Court enactedthe Guanyu Guanche Zhixing (ZhonghuaRenmin Gonghe Huo Minfa Tongze) Ruogan Wenti De Yijian (Shixing): AboutThorough Enforcement ] Questions and Opinion (Trial Implementation), according to theprinciple of obligee’s right to rescission, art.130 provides that: ‘where adonor who for the purpose of evading his legal duty to perform his obligation,triesto grant his assets to othersto dissipate it, such granting of assets will be void if an interested partyalleges his claim. Unfortunately, this article merely provides forcircumstances where the obligor tries to escape his obligation and it isrestricted to only the conduct involving gratuitous transfer of property. Itsscope of application being very narrow, it thus cannot constitute a completesystem of the obligee’s right to rescission. As such, before the promulgationof Contract Law, in the Chinese Civil Law did not have a complete system forthe preservation of an obligatory right.

Article 73-75, Contract Law

See also Li Yong Jun, Hetong Fa Yuanli: Principles of Contract Law, People’s Republic of China GonganUniversity Press, 1999, at page 401. Cui Jian Yuan, Han Shi Yuan, Hetong Fa Zhong De Zhaiquan Ren Daiwei QuanZhidu: The System of the Obligee’sRight To Rescission In The Law of Contract published in Zhongguo Faxue:China’sJurisprudence, 1999, 3rd ed.

In the understanding the constitutiveelements of the obligee’s right to subrogation, it is important to note that abalance should be struck between the two target values of safeguarding thesecurity of transactions and respecting the freedom of intentions of theparties. In other words, even if the obligor does not take positive action tocarry out his obligation so much so that it impedes the realization of theobligee’s claim, the obligee can nevertheless easily invoke his right ofsubrogation as he pleases, which can be detrimental to the interests of theobligor and the third party. If the mandatory effect of the claim is allowed toenlarge indefinitely, not only will it cause the principle of relativity ofcontract to collapse, it will also cause the obligor to be enslaved to theoblige as a result of the existence of the contractual relation. As can be seenfrom the provisions of Construction of Contract Law, articles 11, 12 and 13,the Supreme People’s Court has severely confined the conditions of theapplication of rights of subrogation.

Article13 ofConstruction of Contract Law hasdefinitively determined that the obligor’s delay in performance (includingobligor’s non-performance of his due obligation to the obligee) as an importantconstructive condition for the right of subrogation. The legislations in mostcivil law countries basically consider a delay in performance as an importantcondition for deriving the right to subrogation.

Article 73, Contract Law

Article 11, section 2, Construction ofContract Law,

Before the obligor actually is in delayof performance, it is difficult to anticipate whether an obligee’s rights canbe realized. Under circumstances like these, to allow the obligee to exercisehis right of subrogation would be a gross interference of the obligor’saffairs. The law will not unduly subject the obligor to the enslavement of theobligee, so that the obligor would be totally under the control of the obligee,merely because the obligor has an obligation towards the obligee. Thisemphasizes the fact that the law no doubthas provided for the protection of theobligee’s interests, but on the other hand, it had neglected the obligor’sfreedom of conduct. The law should thus strike a balance of tension between thetwo and such balance is known as the ‘period of delay of performance’. Beforethe expiration of the period of performance for the discharge of theobligation, the obligor possesses freedom of economic conduct, he could performhis obligation at his will or find other means to discharge his obligation.During this time, the obligee cannot willfully interfere with the conduct ofthe obligor until the expiration of the period of performance. If however, theobligor continues in non-performance of his obligation and even delays in hisperformance, and having no financial means to discharge his obligation therebycausing the obligee’s claim to be unrealizable, at this point thenit would not do to continue tovehemently argue for the value of the ‘obligor’s economic freedom’. Rather, oneshould argue for the protection of obligatory rights from the perspective ofthe ‘protection of the obligee’s interests’ and thereby accord the obligee withthe right to subrogation.

The reason for limiting the purportedobligatory right to the monetary obligation is to ease the application of thenew system of right to subrogation and also to raise the efficiency oflawsuits. This is because the sub-obligor’s obligation to the obligor is viathe delivery of goods and providing of services, and does not involve paymentof cash. This will in turn cause problems and trivialities in litigation. Onthe whole, it creates more complications and even causes situations where thereis a supervening impossibility of performance, thus the reason for obligatoryright in a monetary claim.

The specific criterion for judgment isgenerally that based on an obligor’s inability to repay. If an obligor has astrong financial capacity, even if he does not duly perform his obligation andeven delays in performing his obligation, thereby causing a reduction in thetotal assets, he will not endanger the realization of the obligee’s right. Thisis as long as the obligor’s assets is still sufficient to discharge hisobligatory right to the obligee and the obligee is left to exercise his rightof subrogation by petitioning to the court to impose a mandatory enforcement onthe obligor.

Article 11, section 4 and article 12,Construction of Contract Law

Generally speaking, there are four typesof rights that belong exclusively to the obligor: First, non-proprietaryrights. This mainly refers to rights relating to the personal status as anindividual, for example, guardianship right, right to petition for divorce,right to claim of legitimate children, etc. second, for the purpose ofprotecting the intangible benefits of property of the obligee. For example, therecognition of inheritance, bequeathal, or rights to abandonment, right tomaintenance, right to petition for the compensation for damages due to theinfringement, impairment of one’ life, health, reputation, freedom etc. third,the right not to alienate. This mainly refers to the obligatory rights arisingfrom fiduciary relations or relationship or special status or that areintimate, right to abstention etc. fourth, right not to be detained. Forexample, remuneration for labour, pension moneys, retirement moneys, reliefmoneys and pension for the disabled etc.

With regards to the exercise of therights to subrogation, in each country’s legislation and the practice realm,there exist 2 types of methods, litigation and direct measure of enforcement.The Japanese civil law prescribes that one can discharge a monetary claim bythe method of litigation or arbitration or to protect the right of admittancevia direct measure. Chinese Taiwan local civil law has yet to expressly providefor it and in reality, the obligee is free to choose from either of the twomethods.

Article 73 section 1, Contract Law


Article 20, Construction of Contract Law

Article 18, section 1, Construction ofContract Law

Article 74, Contract Law

Article 74, Contract Law

With regards to whether the redemptionperiod must be exceeded before the right of rescission can be enforced, thelegislation and doctrines of different countries have given differentinterpretations. German civil law stipulates that the time period forperformance of the obligation must be exceeded, while common teachings inFrance and Japan considerthat theobligatory right need not have exceeded its time limit to enforce rescissionrights. In China, Contract Law and judicial interpretation of the SupremePeople’s Court have not set down legislation with regards to this question.

Article 74, Contract Law

Rescission aims to restore the propertyof the obligor that is subject to liability and not to safeguard his ability tohand over specific subject-matter. Thus, as long as the obligor’s transfer ofthe specific subject-matter leads to a decrease in property and the lack ofrepayment ability, or it prejudices the obligatory right, the obligee canenforce his right of rescission; in other words, there is no question about therescissionary right itself.

See Shi Shang Kuang, Zai Fa Zong Lun:The Pandect on the Law of Obligation, China University of Politics and LawPress, 1999 edition, at page 473, for the civil procedural law in China on whoasserts the claim and who adduces the evidence. The obligor bears the burden ofproof in showing that the transfer of property was reasonable.

Article 75, Contract Law

Article 8, Contract Law

With regards to the nature of thisperiod, the civil codes of each country reveals different judicial attitudes,some stipulate it as limitation of action, while some as removal of repulsion (chu chi qi jian).

See Yang Li Xin, Guan Yu He Tong FaZhong De Zhai De Bao Quan Wen Ti: In Relation to the Question of Protection ofObligations in Contract Law, taken from Fa Xue Qian Yan: The ForwardPosition of the Law, 2nd edition, at page 28.

See Wang Jia Fu, Ibid, at note 24,at page 186.

Article 25, Construction of Contract Law

The right to demur in law is the right ofresistance (dui kang quan) to impedethe opposite party from enforcing his right. The standard is based either onthe effect of enforcing the right to demur, or on the postponement of theeffect of the opposite party’s right to demur. The legal right to demur iscategorized as permanent (extinguished) right to demur or delayed (temporary)right to demur. The former is represented by the right to demur that arisesupon the expiration of a prescription, while the latter is represented by theright to demur for concurrent performance and the right to demur when adverselyaffected.

Article 68, Contract Law. The applicableconditions for the right to demur when adversely affected, that is stipulatedby the law of contract in China, has rather significant differences from therules of other civil law countries, that is, it is more lenient, having adoptedthe related regulations in the “United Nations Convention on International Saleof Goods”.

Two different legislations exist in variouscivil law countries with regards to when the property of the later-performingparty has to decrease evidently The first is an obvious decrease in propertyafter the formation of the contract, the second is a decrease already at thetime the contract is formed, such as Rule 165 in Austria’s Civil Code.

Article 69, Contract Law

Article 94 of Contract Law stipulates: aparty can repudiate a contract when one of the following situations occur: ……(2) Before the time period for performance ends, one party expresses clearly,or shows evidently with his conduct, that he will not perform the mainobligation; ……

See Wang Li Ming, Yu Qi Wei Yue Zhi Du De Ruo Gan Wen Ti: The Regime for ProspectiveBreach of Contract – Some Questions, Law Press, 1999 edition.

rticle 66, Contract Law

See Su Jun Xiong, He TongYuan Ze Ji Qi Shi Yong: The Principles Of Contract Law and Its Application,San Ming Bookshop, at page 111.

If performance by one partyis partial or flawed or unsuitable for performance, the other party still canfile for pleading. No problems relating to pleading will arise if one party hasalready embarked on proper performance. Wang Ji Fu, supra n 24, page 403.

If one party requests forperformance without notifying the other party that it has already fulfilled itsobligation, the latter (the accused party) will be disadvantaged in the eventthat the performance does not comply with the contract, such that it isdelayed, unsuitable or flawed etc. This is unfair to the accused party whichwill not get to enjoy the requesting party’s performance, or it can only enjoyperformance which is contrary to the contract. Wang Li Ming, Wei Yue Ze RenLun: Responsibility arising from breach of contract, ChinaUniversity of Politics & Law Press, Revised Edition for year 2000, at page267.

ee Wang Ze Qian, Ming FaJue Shuo Yu Pan Lie Yan Jiu: Research On Civil Doctrine And Case Studies,Volume 5, China University of Politics & Law Press, Edition for year 1997,page 146.

See Wang Li Ming and Yao JianYuan, supra, note 36, at page335-336.

In both the German Civil Codeand Japanese Civil Code, there are no regulations relating to the right todemur for later performance.

Pre-contractual obligationrelates to the start of negotiation to just before the completion of contract.The period relating to liability for breach of contract is from the timethe contract comes into effect, till thecompletion of it. Post-contractual obligation refers to any incidentalobligations, even though the contract has been completed and the contractualrelationship extinguished. Therefore, pre-contractual obligation occurs priorto the existence of the contract, post-contractual obligation occurs after thecompletion of the contract while the liability for the breach of contract is inthe middle of these two.

The argument for extention ofcontractual obligation can also be found in the common law contract law, seeRobert A. Hillman, The Richness of Contract Law, Kluwer AcademicPublishers, 1997, at page 23-32.

Article 60, Section 2, Contract Law

Article 42 and 43, Contract Law

Article 92, Contract Law

Liability for negligence inthe making of a contract was suggested by the German scholar Yelin anddeveloped by German case law. This has profound impact on China. Article 61 ofCivil Rules states, “When a civil action is deemed to be ineffective orrejected, the party which has derived property due to this action will have toreturn it to the damaged party. This will be akin to damages given by theliable party to compensate the loss suffered by the other party. As both sidesare at fault, they should bear their respective responsibilities.” Article 16of Economic Contract Law reflects the same principles in the case of acommercial contract. Therefore, academics suggest that the regulations in bothCivil Rules and Economic Contract Law include this liability for negligence inthe making of a contract. Zhou Da You and Duan Xian Yi, He Tong Ze Ren Zi DuChuang Xin Tan Suo: New Explorations into the system of ContractualObligations, in Tan Suo: Exploration, 1999, Volume 6.

Certain articles in ContractLaw such as Articles 42 and 43 adopted regulations from PICC and PECL, refiningthe regulations relating to pre-contractual obligations and liability fornegligence in the making of a contract.

See Chui Jian Yuan, Di Yue Shang Guo Shi Ze Ren Lun: Doctrine of Liability for Negligencein Making a Contract, University of JilinSocial Science School Paper, 1992, Volume 3.

See Zhang Guang Xing, Zhai Fa Zhong Lun: General Doctrine of theLaw of Obligations, Law Press, 1997, at page 56.

See Liang Hui Xing, Min Fa: Civil Law, Sze Chuan People’s Press, 1988, at page 144.

For most cases, incidental obligationsarise from and are based on the principle of good faith and it is present atvarious stages of the contract; from when the parties negotiate and concludethe contract to the time the rights and obligations of the contract are carriedout etc. The parties should bear the main incidental obligations of providingassistance, notification, confidentiality, etc of the contract.

See Wang Li Ming, Wei Yue Ze Ren Lun: Liabilityin Breach of Contract, China University of Politics and Law Press,1996, at page 54.

See Xie Bang Yu, Min Shi Ze Ren: CivilLiability, Law Press, 1991, at page 107.

See Wang Jia Fu, He Tong Fa: Contract Law, China SocialSciences Press, 1986, at page 481.

See Jin Xiao, “Guo Cuo” Bing Fei WeiYue Ze Ren De Yao Jian: “Fault” is not the main element of liability for breachof contract, Learning Law, 1987, Volume 3.

See Chui Jian Yuan, supra, note 79, at page 73.

See Wang Li Ming, Chui Jian Yuan, supra, note 36, at page 54.

See Liang Hui Xing, Cong Guo Cuo ZeRen DaoYan Ge Ze Ren: From non- fault liability to strict liability, takenfrom Min Shang Fa Lun Cong: Theories ofCivil and Commercial Law, Chapter 8, Law Press, 1997, at page 4 – 5. ChuiJian Yuan, Yan Ge Ze Ren? Guo Cuo Ze Ren?: Strict Liability? Fault Liability? ,taken from Min Shang Fa Lun Cong:Theories of Civil and Commercial Law, Chapter 11, Law Press, 1997, at page190 - 197.

Strict liability is the direction of thedevelopment in contract law. Two major legal systems have adopted differentprinciples in attributing liability with regards to breach of contract. TheChinese legal system has adopted the principle of fault liability with regardsto most contractual liability while theCommon Law system has adopted theprinciple of strict liability.

Article 114 of the France Civil Codestates: “Whenever the obligor cannot prove that the reason for not carrying outthe obligations arises because the responsibility should not be attributed tothe individual, even if the individual is bona fide, the obligor should, ifnecessary, pay the compensatory damages for not performing or delaying theperformance of the obligations.” Article 275 of the German Civil Code states:“The obligor should bear liability for negligence, whether intentional or not,unless otherwise provided.” Even if in the recently amended Taiwan CivilObligations, the principle of fault liability for contractual liability isaffirmed. Article 220 of the German Civil Code stipulates: “The obligor shouldbear liability for his negligent conduct, whether intentional or not.”

Looking at the relevant internationalconventions, the United Nations Convention on International Sale of Goods andthe Unidroit Principles of International Commercial Contracts both adopted theprinciple of strict liability. Article 108 of the Principles of EuropeanContract Law provides: “If the non- performing party proves that the non-performance is caused by an obstacle that cannot be controlled, one cannotreasonably expect him to be able to foresee the said obstacle at the time thecontract was made, or to avoid or overcome the obstacle or its consequences,then he should be forgiven for not performing.” If the United NationsConvention on International Sale of Goods is said to have adopted the principleof strict liability because of the influence of the Anglo- American Law, thenthe Unidroit Principles of International Commercial Contracts and thePrinciples of European Contract Law in adopting the principle of strict liability,should be regarded as the consensus reached by the leading respected academicsof two major legal systems after much debate, and reflects the common trend inthe development of contract law.

From the perspective of the relevantlegislature of China, the General Principles of Civil Law and the ForeignEconomic Law has adopted the principle of strict liability, but the EconomicContract Law adopts the principle of fault liability.

See Chui Jian Yuan, Hai Xia Liang An He Tong Ze Ren Zhi Du De Bi Jiao Yan Jiu: The Comparative Research of the Regime ofContractual Liability in China and Taiwan, Student Paper ofUniversity of Qinghua, 2000, Volume 2.

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