Free Essay Example. Standardized Contracts

A contract refers to an agreement on the establishment, alteration or termination of a civil right-obligation relationship between natural persons, legal persons or other organizations as subjects with equal status. Contract law varies from country to country, though the basics are almost similar. Generally, contract law maintains that if a buyer agrees to pay for a particular product or good from a seller, the seller is supposed to provide you with the product on time and in perfectly good condition. In addition, the buyer is expected to pay for that product. This, in many countries, is considered as the standardized contracts which apply across the various types of consumer transactions. The Contract Law of China was adopted at the Second Session of the Ninth National People's Congress, which was held on March 15, 1999. According to contact law of China, standard contractual clauses are clauses that are formulated in advance by a party in a contract for the purpose of repeated usage and that are not a result of consultation with the other party in the making of the contract (Yuqing & Danhan, 2000).

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While China has a clear contract law which coves standardized contract transactions, Cambodia legal systems lack a clear law on the same. On the contrary, the basis of contract formation in Cambodia is on the principle of consent. The Civil Code Article 751 provides special provision on product liability by limiting the extent of liabilities under certain circumstances (Uchikawa & Keola, 2008).

Breach of Contract

Breach of contract occurs when there is no performance, late performance or the parties involved fail to meet the obligations stipulated in the contract. China Contract Law provisions for breach of contract are contained in chapter seven of the contract law. Remedies for breach of contract is contained in Article 107-Article 122 (Yuqing & Danhan, 2000). On the other end in Cambodia, remedies for breach of contract are contained in the Civil Code of the Kingdom of Cambodia in Articles 389 and 390. Both covers delayed performance, incomplete performance, the impossibility of performance and other non-performance in contracts. However, China remedies for breach of contract cover a wider scope compared to Cambodia's Civil Code.

China Contract Law provides that all parties involved in a contract shall fulfil their respective obligations fully as contracted. In the case, any additional expenses caused to the creditor by the debtor's discharge of debts in part shall be borne by the debtor (Yuqing & Danhan, 2000). This is also the case in Cambodia, whereby Article 398 of the Civil Code of the Kingdom of Cambodia provides that the obligee may demand damages from the obligor when the requirements for damages are satisfied. A court of Law can also decide on moral damages upon demand from the obligee (Uchikawa & Keola, 2008).

In China, termination of rights and obligations under the contract is covered in Chapter VI of the contract law. These provisions cover circumstances, under which parties may dissolve a contract as well as the approvals and registration procedures (Yuqing & Danhan, 2000). According to these provisions, the terminations of rights and obligation under a contract shall not affect the validity of its causes regarding settlement and liquidation (Yuqing & Danhan, 2000). Termination of contract provision in Cambodia is contained in Article 407 and 411 of the Civil Code of the Kingdom of Cambodia. Both countries law provide a clear guideline on when and how contracts can be terminated. A court can be used to review the terms of a contract to determine the termination; however, certain restrictions are provided in both laws.

Cambodia lacks laws prohibiting or regulating contracts, arrangements, combinations and understandings in restraint or trade or commerce. On the other hand, China Contract Law provides prohibitions for contracts in chapter three (Uchikawa & Keola, 2008). Article 44 provides the effectiveness of contract whereby it states that a lawfully formed contract becomes effective upon its formation. Unlawful contracts, i.e. contracts covering unlawful activities, are prohibited. In addition, the Contract Law of China also provides certain prohibitions on contracts made by persons with limited capacity and unauthorized agents.

Consumer Protection Law and Unfair Contracts

Law of the People's Republic of China on Protection of Consumer Rights and Interests was adopted on October 31, 1993 (Oyerby, 2005). The Law was formulated to protect the legitimate rights and interests of consumers, maintenance of the socio-economic order and promotion of the healthy development of the socialist market economy (Oyerby, 2005). The provisions of the consumer protection law in China covers the rights of consumers, obligations of business operators, protection of the legitimate rights and interests of consumers by the state, consumer organizations, settlement of disputes, legal responsibility as well as other supplementary provisions. On the other hand, Cambodia, at present, does not have comprehensive legislation on consumer protection. However, the Law is being drafted by the government and is awaiting parliamentary enactment. The Law on the Management of Quality and Safety of Products, 2000 (LMQSP) is currently the closest LLaw to a general consumer protection law. Contract Law of China protects parties against unfair contracts. The Civil Code of the Kingdom of Cambodia also contains provisions which protect parties from unfair contracts.

References

Overby, A. B. (2005). Consumer Protection in China after Accession to the WTO. Syracuse J. Int'l L. & Com., 33, 347.

Uchikawa, S., & Keola, S. (2008). Small and medium enterprises in Cambodia, Laos, and Vietnam. ERIA Research Project Report 2008, 5, 237-273.

Yuqing, Z., & Danhan, H. (2000). The new contract law in the people's republic of china and the UNIDROIT Principles of international commercial contracts: A brief comparison. Unif. L. Rev. ns, 5, 429.