On Breaches Of Peremptory Norms Contractual Effect

The Contract Law of PRC was promulgated in 1999. The new Contract Law established the double legislation value of the promotion economical transaction and the safeguard social order. The new Contract Law promoted economic transaction by reducing invalid contacts and protected the social order by intervention of governments into the acts which seriously damaged the socio-economic order. These regulations are reflected in the provisions of article 52, paragraph 5 of the New Contract Law: contracts which violate compulsory regulations of the legal or administrative rules will be invalid. On the basis of absorbing foreign successful experience, The New Contract Law has made significant adjustment regarding the original legislation and has reduced the scope of invalid contract greatly. But under the current legislation, if all the contracts which violate compulsory regulations are judged to be invalid, it will be difficult for The Contract Law to protect transactions, because many contracts which don not damage the interests of society and country will be invalid. Therefore, the compulsory provisions must be reasonably defined, identified and applied. The application will be limited to protect the state and public interests. Private areas will no longer be infringed.The understanding and application of the article 52, paragraph 5 of The Contract Law is significantly different in theory and practice. Therefore, it is necessary to identify the compulsory regulations to determine the validity of contracts. The full text is divided into three parts.The first part describes the current status about the violation of the compulsory provisions. Firstly we show the meanings of the compulsory regulations. Although the terminology used in the legislation is not the same around the world, the meaning of such terms is expressed basically the same. Then we illustrate that the scope of the compulsory regulations in our law systems should be laws and administrative regulations. Subsequently, by analyzing the process of legislation about the compulsory regulation, we can see that law and state more and more respect the autonomy of the parties, and intervention by the power of state the private on contracts become less and less. In practice, the Supreme People's Court is inclined to reduce the contract intervention.The second part introduces the theory of invalidity of contract in foreign countries and Taiwan area of China. This part compares related theory of the Britain, the United States, Germany, Japan and Taiwan of China. Firstly, in common law countries, Britain generally distinguishes the provisions that violate the positive law and the common law from the contract which violates the public order and the good customs. While the United States think that it is about the topic of the violation of public policy. In the civil law countries, Germany theoretically divides the mandatory norms and standards district boundaries into action against norms violations of laws against sexual norms and assess the validity of the act. Putting forward a various theories, such as the main normative nature, object norms that regulate the center said that the purpose of standardized, measurable benefits that other theories law. Japan divides the compulsory provisions into 'compulsory' and 'ban regulations'. When the law is divided into the private law and the public law, the process has gone through four stages. The theory of determining violation of compulsory regulations in Taiwan area of China comes from the theory and relative experience of Germany and Japan.The third part is about some related viewpoints regarding to the validity of the terms in the situation of violating the compulsory regulations. Firstly, we analyze the function and the purpose of Article 52, paragraph 5 of the contact law. These ideas not only provide a way to make the public law regulate private acts and overcome the limitations of regulation of the private law, but also clearly define the scope of the public law to enter the field of the private law so as to better protect the private scope. Secondly, the flaws and mistakes of understandings to the compulsory regulations and the validity of the contact terms in china are pointed. Finally, the way of recognition of the compulsory regulation is based on the language feature with the core of mandatory nature of compulsory regulations. Furthermore, the way recognition must consider whether the non-mandatory regulations allow private parties to dispose. As far as the standard to decide the validity of the contact terms in violation of compulsory regulations, the author believes that we should clearly acknowledge that the theory basis of the judgment to violate the compulsory provisions of The Contract Law is intrinsic value and the connotation of the social public interests. On this basis, the mandatory regulations are divided into the private mandatory law and the public mandatory law. Further, according to the goals and targets of the compulsory regulations, compulsory regulations of the public law will be divided into effect regulations and management regulations. Only if the contract violates the effect regulations, it will be regarded as invalid. This idea does not role out the role of management regulations. On the contrary, the main reason to judge the validity of the contact terms is not the violation of compulsory law and administrative regulations but the violation of the public interests.