As a civil law jurisdiction, the relevant statute law, whether in the form of a code
or other legislation, is the primary source of law for the courts. Be that as it may,
historically, Confucianism has exerted a profound and enduring influence in every
walk of life in Chinese society including, its sense of values and morality extending
to law and politics. The doctrine of Mean and the concept of Li are two essentialities
enshrined in Confucianism. The former represents moderation, sincerity, honesty
and rectitude,
85 its purpose being to maintain balance and harmony; the latter provides the norms of good behavior in society.
86 Both these are conspicuously
reflected in modern Chinese law in two respects. First, good faith arising from the
concept of Li prevails not only as a moral standard for society but also as an
overriding legal principle governing civil acts and commercial contracts. Secondly,
absolute rights or obligations are not entrenched in the law; courts often use their
discretion to maintain a balance.
Against the above background, it is anticipated that there must have an implied
duty to the shipowner regardless of whether the statute law provide a specific
provision.
6.2 Good Faith Principle in Chinese Law
Good faith is a well-established general principle in Civil law.
87 There has been no
“piecemeal solution” such as the adoption of implied terms as in English law. The
principle of good faith has been codified into legislation in most civil law countries,
such as Germany and France as well as in China.
88 Unlike in the U.S., in civil law
jurisdictions, this principle is not only applicable during the performance of the
contact, but also is an underlying principle at every stage of a contract, which
includes the negotiation and formation of a contract. For example, Article 1104 of
the French Civil Code which came into effect on October 2016 for example, it
provides “[C]ontracts must be negotiated, formed and performed in good faith. This
provision is a matter of public policy.”
89 It limits the freedom of contract of the
parties for public policy reasons and is an overriding principle from which parties
cannot contract out. In Chinese law, the good faith principle can be found in Article
7 of the General Rules of the Civil Law of the P.R. China (GRCLoC), which came
into effect on 1 October 2017. It provides “[C]ivil subjects engaging in civil
activities shall follow the principles of good faith, adhere to honesty and keep
85 Encyclopædia Britannica (2008).
86 Zhang (2000), p. 204.
87 China has not yet adopted a Civil Code or a Commercial Code. The Civil law contains binding
provisions pertaining to commercial transactions.
88 For example, s. 242 of the German Civil Code and Art.1104 of the French Civil Code (entered
into force on 1 October 2016).
89.
Shipowner’s Implied Obligations in a Charterparty Relating to. . .
331
or other legislation, is the primary source of law for the courts. Be that as it may,
historically, Confucianism has exerted a profound and enduring influence in every
walk of life in Chinese society including, its sense of values and morality extending
to law and politics. The doctrine of Mean and the concept of Li are two essentialities
enshrined in Confucianism. The former represents moderation, sincerity, honesty
and rectitude,
85 its purpose being to maintain balance and harmony; the latter provides the norms of good behavior in society.
86 Both these are conspicuously
reflected in modern Chinese law in two respects. First, good faith arising from the
concept of Li prevails not only as a moral standard for society but also as an
overriding legal principle governing civil acts and commercial contracts. Secondly,
absolute rights or obligations are not entrenched in the law; courts often use their
discretion to maintain a balance.
Against the above background, it is anticipated that there must have an implied
duty to the shipowner regardless of whether the statute law provide a specific
provision.
6.2 Good Faith Principle in Chinese Law
Good faith is a well-established general principle in Civil law.
87 There has been no
“piecemeal solution” such as the adoption of implied terms as in English law. The
principle of good faith has been codified into legislation in most civil law countries,
such as Germany and France as well as in China.
88 Unlike in the U.S., in civil law
jurisdictions, this principle is not only applicable during the performance of the
contact, but also is an underlying principle at every stage of a contract, which
includes the negotiation and formation of a contract. For example, Article 1104 of
the French Civil Code which came into effect on October 2016 for example, it
provides “[C]ontracts must be negotiated, formed and performed in good faith. This
provision is a matter of public policy.”
89 It limits the freedom of contract of the
parties for public policy reasons and is an overriding principle from which parties
cannot contract out. In Chinese law, the good faith principle can be found in Article
7 of the General Rules of the Civil Law of the P.R. China (GRCLoC), which came
into effect on 1 October 2017. It provides “[C]ivil subjects engaging in civil
activities shall follow the principles of good faith, adhere to honesty and keep
85 Encyclopædia Britannica (2008).
86 Zhang (2000), p. 204.
87 China has not yet adopted a Civil Code or a Commercial Code. The Civil law contains binding
provisions pertaining to commercial transactions.
88 For example, s. 242 of the German Civil Code and Art.1104 of the French Civil Code (entered
into force on 1 October 2016).
89
Shipowner’s Implied Obligations in a Charterparty Relating to. . .
331