Freedom of Contract in the EU and China

• Author: Junwei Fu
• Position: Beijing Institute of Technology School of Law - China
• Pages: 274-280

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Junwei Fu

Beijing Institute of Technology School of Law, China

fujunwei@hotmail.com

Abstract. In modern contract law, freedom of contract is of an underlying principle

that people have struggled for centuries. Bo th China and Europe fully realized its value,

although in distinct ways that are deeply rooted in the two regions’ historical and cultural

backgrounds. In Europe, freedom of contract is restricted by principle s of good faith, fair

dealing, social justice and fundamental rights, whereas in China, except for those

limitations set by the Europe, the traditional notion of contract voluntariness is rather

limited by the collective interests and interests of the state. This paper is intending to

describe the different understandings of freedom of contract in the EU and China.

1. Introduction

The law of contracts in fact, is to make the individuals exercise their freedom without an y d amage to

others. Freedom of contract can be regarded as one of the most fundamental principles in the law of

contracts, which ulti mately serves the private autonomy of individuals.

1

However, the exercise of

freedom cannot impair others’ interests and the welfare of the state. So the law of contrac ts has to set out

parameters of good faith and fair dealing, social justice, and huma n rights among others, which have a

mandatory nature, as binding rules to ensure that the freedom can be well exercised. In brief, contract law

consists of the rules that endow people with freedom a nd the regulations that restrict people’s freedom.

Among those rules, the default rules in contract la w provide the freedom, which can be used to guide the

parties to conclude the contract and also fill in the gaps in the contract, whereas the mandatory rules

restrict the individuals’ freedom, as the parties can only be bound by them without any other choice. It is

reasonable to say that the law of contracts is constructed around the pr inciple of the freedom of contract.

2. Origin

2.1 China

In ancient China, Confucianism had been the dominant thought ruling society since the Han dynasty to

maintain the hierarchy o f the state, and it continues to influence the Chinese methods of living and

thinking tod ay.

2

T he key value of Confucianism is self-cultivation, which can be seen as a remarkable

limitation to party autonomy since it la ys down a great deal of rules for people to behave obediently.

Among those values, morality (li), which is to instill in the individual, an inner se nse of awareness of the

acts that are shameful, or propriety, has a significant impact on civil society. Civil issues were, then,

considered minor matters, whose resolution was suggested through extra-legal mechanisms, such as

mediation. The transplantation of moder n civil law into China began in the early 1900s, and the first draft

of the Chinese ci vil code, which is mainly based on the German and the Japanese civil codes, was

1

Dagmar Co ester-Waljten, Constitutional Asects of Party Autonomy and its Limits – The Prospective of Law,

Stephan Grundmann & Wolfgang Kerber & Stephen Weatherill, Party Autonomy and the Role of Information in the

Internal Market, Walter de Gruyter, 2001, p. 41.

2

Antonio S. Cua, Confucianism: Ethics, Antonio S. Cau, Encyclopedia of Chinese Philosophy, Routledge, 2003, pp.

72-78.