The Research On The Construction Of The Terms Of The Contract Value And Its Defect Remedial

We are living in a society full of risk and opportunity, risk means higher profits, it also means high uncertainty, in other words, the high failure rate. As a rational economic man, we always tend to use the lowest price to take risks, or hope that the cost is lower than the benefit from the risk aversion. Not everyone has enough ability to take risks. So we need to transfer the risk between people with different risk preference.In addition to face to face trading, basically there is no time difference between contracting and performance, there is a time interval among the rest of the formation and implementation of contract, and the higher level of economic development, the longer the time interval between contracting and implementation. At the same time, along with the continuous development of the times, science and technology unceasing progressing, the transaction is in the form of constant progressing, also has a growing market, from the physical market, to the invisible market, from a roadside stall, development to all over the country, even to the world’s major markets. Market starting from the date of birth, its purpose is to promote trade. It’s hard to say whether the development of the market promoting the change of the transaction form, or is the emergence of a new way to trade promoting the development of the market, but for the purpose of this article, the relationship between the market and trading is not important, here, just needs to know the market is evolving and is gradually becoming complex, in the same way, the way to trade is changing, is also becoming more and more complex, gradually from physical deal to a virtual transaction, from real-time transactions to late trade, contract is also evolving from oral commitment, to the text of contract, and then evolved to electronic contract, from short-term contract to long time contract, from simple to complex contract. The more complex of the transaction form, the more complex of contract forms. Since the contract naturally deals with transaction, we can see risk flowing through the trading, in fact is using different contract arrangement for risk sharing between people. From this sense, the contractual arrangement is a risk-sharing arrangement. And when we are in the design of the contract terms, how to balance between both sides with different risk preferences, is a problem worthy of serious consideration.At the meantime, it is noticed that any legal relationship is basically a combination of rights and obligations, the right for you is a duty for me. Then can we price the rights and obligations separately? The answer is yes, and it has emerged in practice, that is options. Option, a kind of choice, is right to buy or sell at the stipulated price on a certain number of established goods in the future. From the definition of option, we can see that option in essence is a privilege, by using it we can divide a complete trading process into several clearly pieces. And the the whole process of the contracting process become a swapping of options, as long as bearing the consequences, the parties may choose the contracting or contracting, the performance or no performance, continue to negotiate or to terminate negotiations and so on.This article defines the concept of the terms of the contract value, which are able to increase the contract value (the buyer’s and the seller’s value), such terms include the terms of price, quality, performance and liability for breach of contract and dispute resolution clauses, these clauses will affect the subjective judgment of the parties, and then affect the contract value. In the practice such terms have played the essential role of the contract value and has been widely used, from the perspective of option, we can find a more efficient way to design the terms of the contract, at the same time, and to avoid a lot of litigation costs. The contract is arranged for the future, and accurately expecting for the future is the important prerequisite of risk aversion, the option contract will play an important role for the contract party to disclose and access the information and as well as the incentives.It cannot be ignored because of the existence of semantic fuzzy and uncertainty of future, there is unable to overcome the defect of the contract value clauses. The semantic fuzzy is divided into the unconscious and deliberately vague, we cannot overcome unconscious fuzzy, deliberately vague from a perspective of option, it is intentionally an embedded option in the contract by the parties, when disputes happen in the future, he can rely on its comparative advantage in the proof to get favorable interpretation from the judge. The uncertainty of the future is the reason for breach of the contract which cannot be completely avoided When the contract party find it more efficiency to breach than to perform in the future, he will choose to default this accords with the assumption of economic man,, from the standpoint of economic efficiency. But the traditional contract law doctrine usually labels the breach immoral. By setting default clause in the contract explicitly, we can get rid of the bondage of traditional doctrine, and even get rid of the regulation of law, because the contract law is based on the principle of freedom of contract, which rarely limit agreement between the parties. The article also analyzes remedies for these defects combined with the real cases.Although options, to some extent can encourage both parties to build a win-win cooperation, but even pure option is also a kind of contract, which exists the possibility of default, so the solution to the problem is not just about the effective design of the contract terms, also lies in the improvement of the national legal system construction, the law-abiding awareness of people and the rising of moral self-discipline level.