Invalidity of Contracts in Violation of Mandatory Provisions of Public Law: Judicial Practice in China

Abstract

Researchers have always favored how mandatory provisions of public law affect the validity of contracts. After the implementation of China's Civil Law, how to recognize the invalidity of contracts that violate the mandatory provisions of public law has also been hotly debated by the theoretical and practical circles. From the perspective of the Civil Law, which fully respects the concept of private law autonomy, and from the perspective of assuming the validity of a contract as a prerequisite for the application of the law in practice, a contract that violates the mandatory provisions of public law shall, in principle, be presumed to be valid. In determining whether a contract that violates the mandatory provisions of laws and administrative regulations is null and void, it is necessary to carefully analyze whether the legislative purpose of the mandatory provisions will lead to the nullity of the contract, and at the same time, pay attention to the distinction between the mandatory provisions that result in the nullity of the contract and those that result in the contract not coming into effect, being of pending validity, or being voidable. Contracts that violate the mandatory provisions of local laws and regulations or administrative rules may be invalid because they violate public order and morals, but they are not invalid because they are "against the law".