Flexible Terms Archives - understand-culture

Change of Circumstances

Article 533 of China’s Civil Code covers a contract whose basic conditions change in a major way that the parties could not foresee and that is not a commercial risk. If continued performance would be clearly unfair to one party, “the party adversely affected may renegotiate with the other party.” Only if they fail to agree within a reasonable time may either party ask a court or an arbitration body to change or end the contract.

In one reported case, a court refused a request for higher rent based on rising prices.

When Terms Are Unclear

Article 510 of the Civil Code says: “After a contract takes effect, if the parties have not agreed on quality, price or remuneration, place of performance or other matters, or their agreement is unclear, they may supplement it by agreement. If they cannot reach a supplementary agreement, these are determined by the related clauses of the contract or by trade practice.”

Only when this fails does Article 511 supply fixed rules.

Force Majeure Certificates

From February 6, 2020, the China Council for the Promotion of International Trade issued free certificates of force majeure facts to companies affected by the COVID-19 epidemic. By February 14, it had issued 1,615, covering contracts worth about 109.9 billion yuan. A company could use one to ask a partner for partial or full release from liability.

The certificate did not settle the matter. A news report that month noted that a company whose notice was rejected still had to prove that the impact “could not be overcome.”

Renegotiate and Keep Performing

In April 2020, the Supreme People’s Court issued guidance on civil cases related to the epidemic. Where the epidemic or the measures against it only made a contract harder to perform, “the parties may renegotiate. Where performance can continue, the people’s courts shall strengthen mediation and actively guide the parties to continue performing.”

The same guidance said that courts would not support a request to end a contract only because performance had become difficult.

Asking for More

In Ming and Qing land sales, a seller could come back after the sale and ask the buyer for more money. The custom was called 找价, “seeking the price,” or 加找. A seller could claim that “the price was not enough.” The historian Cao Shuji found that after the Qianlong era, 加找 became a standard contract form.

A 2012 study in the law journal The Jurist cites the finding that repeated 找价, even after a deed of final sale, was “a very common custom.” Qing law later limited it. Where a deed of final sale did not mention extra payments, none were allowed.

Leave It to the Next Generation

On October 25, 1978, at a press conference in Tokyo, a Japanese reporter asked Deng Xiaoping about the Diaoyu Islands. Deng said that the two sides had set the question aside when they normalized relations. “It does not matter if such a question is set aside for a while, even for ten years.”

He added: “Our generation is not wise enough. Our next generation will surely be wiser than us. They will always find a good way, acceptable to all, to solve this question.”

A Historical Document

On June 30, 2017, foreign ministry spokesperson Lu Kang said of the 1984 Sino-British Joint Declaration on Hong Kong: “As a historical document, it no longer has any practical significance. It is not binding in any way on the central government’s administration of the Hong Kong Special Administrative Region.”

A spokesperson of the British Foreign Office replied that the Declaration “remains as valid today as when it was signed over thirty years ago. It is a legally binding treaty, registered with the UN, and continues to be in force.”

In September 2017, Xu Hong, head of the Chinese foreign ministry’s department of treaty and law, said that China had never denied that the Declaration is an agreement.

Review, Abolish, Revise or Renew

On September 29, 1949, the Chinese People’s Political Consultative Conference adopted the Common Program. Article 55 said: “The Central People’s Government of the People’s Republic of China shall examine the treaties and agreements concluded between the Kuomintang government and foreign governments, and, according to their content, recognize, abolish, revise or renew them.”

Feeling, Reason and Law

In January 2019, a judge reviewed the book 情理法与中国人 (Feeling, Reason, Law and the Chinese) in a piece published by the Supreme People’s Court. She summed up the book’s view: “In the eyes of the Chinese, to accord with feeling comes first, to accord with reason second, and to accord with law third.”

She also defended the saying 法不容情, “the law makes no room for feeling.” It means, she wrote, that a judge must not bring private feeling into a case.

The Vocabulary of Flexibility

变通 To adapt. To act according to the actual situation, not bound by convention. The word is old. The Book of Changes says: “Nothing changes and gets through more than the four seasons.”

通融 To make an exception for someone. To stretch the rules as a favor.

合情合理 To accord with feeling and with reason. The everyday word for “reasonable.”