Reliance Interest In Contract Law, And Compensation Study

Reliance interest is designed by the legislature under the principle of bona fide to ensure the security of transactions. It seems that there have been lots of debates over it since its first coming into being. Domestic studies on this subject are far from enough compared with the fruit-bearing studies outside China. And many problems exist in the judicial practice. This article mainly explores the meaning, composing conditions and the scope of compensation of reliance interest through the methodology of seeking truth from facts, history and comparison.There are six parts beside the introduction.Part I outlines the meaning and characteristics of reliance interest First, it introduces the different doctrines and explains what reliance interest is through the reason why the law has to protect it Then it discusses the characteristics of reliance interest including reasonable reliance, potential existence, the direct relationship with conclusion of contract and the indirectness of damages. Besides, this part also gives some explanation of the differences between reliance interest and performance interest, and those between it and inherent interestPart II explores the history of the theory of reliance interest This part first discusses the development and legislation of it in the civil law system including its germination in Roman law. Then it addresses the evolution of it in the common law system.The third part describes the claiming right basis and composing conditions of reliance interest First, it points out that the claiming right basis of reliance interest should be the principle of bona fide. Second, it explains the composing conditions of reliance interest: one party of a contract acts against the obligations before conclusion of the contract or other bona fide obligations; there is fault lying with the same party; the other party suffers the damages; causality between the violation and the damages; the other party relied on the reliance interest reasonably and with good faith.Part IV analyzes the scope in which the system of reliance interest should apply. In this part the article discusses the various circumstances under which damages can be claimed: revoked offers, void or revoked contracts, revoked ads offering rewards, binding contracts and unauthorized contracts and contracts for donation.