Contracting Information Disclosure Liabilities

During contracting process, it’s quite often that one party conceals relevant informationdue to consideration for self-interests, not only lowering trade efficiency based on contracts,causing difficulty to increase social benefits, but also leading to great risks for the othercontract party. Regarding that matter, modern common law scholars advocate informationdisclosure liabilities for concerned contract parties. But what are the boundaries, contents, andcriteria for contracting information disclosure? The current prevailing academic theories arereasonable third party’s standard, economic analysis standard, and reasonable expectationstandard. Based on current Chinese legal environment, this paper holds that reasonableexpectation standard is more applicable. Strict compliance with information disclosureobligation is required and any breach of the liabilities shall be held accountable.A case of liability for information disclosure is introduced in the lead-in part of thisresearch paper, followed by introduction concerning importance and necessity to define theboundary for liabilities of contracting information disclosure. The first chapter of the essaybriefs sources of information disclosure liabilities. And the second chapter explores liabilityfulfillment, covering topics on what kind of information shall be disclosed, fulfillment criteria,premise, timeframe, and range for information disclosure liabilities. Impact of failure forinformation disclosure and corresponding responsibilities are explained in the third chapter ofthe essay.Summary of this essay advocates that based on current status of Chinese legalenvironment, the theory of reasonable third party’s expectation is more applicable.