Regulating Unfair Contract Terms under Chinese Law

Abstract

This chapter examines how Chinese contract law deals with extremely one-sided, onerous, or otherwise unfair terms, such as exclusions or limitations of liability, penalty clauses, or restraint of trade clauses. It discusses the overt judicial control of such terms under specific legislation, sometimes targeted exclusively at terms in consumer contracts or, to a lesser extent, standard terms. It also analyses how the Chinese courts have exercised a more indirect control by employing traditional general contract law doctrines, such as contract formation and interpretation or the rules on procedural fairness, in order to protect parties against the imposition of unfair terms. A number of hypothetical clauses are analysed to illustrate how Chinese courts regulate unfair contract terms in practice.