Journal of International Commercial Law and Technology Vol.4,Issue 1 (2009) Despite the similarities,many features of UCL are still alien for practitioners from other jurisdictions.In practice,there are still many other issues that can either complicate the use of this legislation or,even frustrate the overall process of seeking fair and justice in the country.Four specific aspects are therefore selected and examined below to provide a snapshot of these (unfamiliar)features,focusing on the contract issue and its implications to trading with China. 3.1 Sources of modern PRC contract law-where to find the laws The sources of modern contract law in China includes the UCL,Chinese Civil Code,a serial of judicial interpretations handed down by the PRC Supreme court and an important special sources,which is named by this paper'hidden'sources.The hidden sources are not the sources'hiding'anywhere;they are the sources unclear and hard to find in practice,such as different levels of administrative regulations,rules,ordinances and guidelines. Interestingly,the hidden sources are,sometimes,very important and powerful 'laws'in dealing with individual cases. The various sources are explained further below.Given the fact that UCL is to be discussed separately in the next part,it is not included here 3.1.I PRC Civil Code Starting from the Chinese Civil code,which is a comprehensive code,governs every comer of people's daily life in the country.Being only a small part of this code,contract related provisions are covered by 6 clauses6.These clauses are very general in nature and,in many occasions,even difficult to understand. For example,clause 113 in the Civil Code provides"If both parties breach the contract,each party shall bear its respective civil liability."Clause like this is of principle in nature.It neither provides any details on how the responsibilities can be defined in the breach,nor the method of calculation of liabilities suppose to be allocated respectively.They are therefore serving a mere purpose of showing the lawmaker's attitude towards the issue of breach of contract.Another example would be the clause 115,which provides a party's right to claim compensation for losses shall not be affected by the alteration or termination of a contract'.This clause is easy to create confusion in practice.In the situation where contract is terminated for a lawful purpose such as force majore,surely,party's right to claim compensation would be affected.The same principle applies when the contract is altered with the consents of both parties. Thus,generally speaking,when dispute arises in any given contract in the country,one would not possibly be able to rely on the Civil Code to solve the matter.The Civil Code is there,as it states in its clause 4,to 'provide the principles of voluntariness,fairness,making compensation for equal value,honesty and credibility'. 3.1.2 The Doctrine of Precedent Despite the fact that precedent is the most important source of the contract law in the Common law legal tradition and it is also an essential aid in solving international trade disputes under UNIDROIT International Commercial Contracts,precedent does not play an important role in the Chinese contract law system at all.In PRC,not all court decisions or cases are published and available to the public.In fact,the large majority remains unavailable (X.Wang,2007).Although the Supreme People's Court,and the Standing Committee of the National People's Congress will occasionally make interpretations of various laws in which ambiguities are at issue,or clarification is deemed necessary by the Communist Party leadership,they are much less common than one would expect of courts in Common Law jurisdictions or international forums would provide. There are reasons that the significance of precedent is not well taken in China.Understanding of these reasons can be helpful to a better understanding of Chinese contract law and its implications to trade.Some of the main reasons are discussed below. Firstly of all,the judicial independence is traditionally a big problem in China.It is worth mentioning that judgments and the publishing of cases are highly political processes,and the courts are normally lack the necessary autonomy to render unbiased decisions that might conflict with Communist Party policy,values,or current laws(Farewell,2006).Sometimes a case will be chosen to be published in order to make a point,or set an example for the public to build confidence in the judicial system.Other times,cases will be published to demonstrate the "rule of Law"to people from other jurisdictions,or to set forth new policies regarding foreign investment,or the activities of foreigners in China.In this sense,publishing UCL in year 1999 as a supporting measure for China's consequent WTO entry provides a good example.It is also well know that the government of China exerts strong pressure on the courts in cases to which they believe there is a national policy interest at stake, or to which they believe are politically sensitive.In addition,despite China's recent revisions of criminal law, Article 111-116.PRC Civil Code 14Journal of International Commercial Law and Technology Vol. 4, Issue 1 (2009) 14 Despite the similarities, many features of UCL are still alien for practitioners from other jurisdictions. In practice, there are still many other issues that can either complicate the use of this legislation or, even frustrate the overall process of seeking fair and justice in the country. Four specific aspects are therefore selected and examined below to provide a snapshot of these (unfamiliar) features, focusing on the contract issue and its implications to trading with China. 3.1 Sources of modern PRC contract law – where to find the laws The sources of modern contract law in China includes the UCL, Chinese Civil Code, a serial of judicial interpretations handed down by the PRC Supreme court and an important special sources, which is named by this paper ‘hidden’ sources. The hidden sources are not the sources ‘hiding’ anywhere; they are the sources unclear and hard to find in practice, such as different levels of administrative regulations, rules, ordinances and guidelines. Interestingly, the hidden sources are, sometimes, very important and powerful ‘laws’ in dealing with individual cases. The various sources are explained further below. Given the fact that UCL is to be discussed separately in the next part, it is not included here. 3.1.1 PRC Civil Code Starting from the Chinese Civil code, which is a comprehensive code, governs every comer of people’s daily life in the country. Being only a small part of this code, contract related provisions are covered by 6 clauses6. These clauses are very general in nature and, in many occasions, even difficult to understand. For example, clause 113 in the Civil Code provides “If both parties breach the contract, each party shall bear its respective civil liability.” Clause like this is of principle in nature. It neither provides any details on how the responsibilities can be defined in the breach, nor the method of calculation of liabilities suppose to be allocated respectively. They are therefore serving a mere purpose of showing the lawmaker’s attitude towards the issue of breach of contract. Another example would be the clause 115, which provides ‘a party's right to claim compensation for losses shall not be affected by the alteration or termination of a contract’. This clause is easy to create confusion in practice. In the situation where contract is terminated for a lawful purpose such as force majore, surely, party’s right to claim compensation would be affected. The same principle applies when the contract is altered with the consents of both parties. Thus, generally speaking, when dispute arises in any given contract in the country, one would not possibly be able to rely on the Civil Code to solve the matter. The Civil Code is there, as it states in its clause 4, to ‘provide the principles of voluntariness, fairness, making compensation for equal value, honesty and credibility’. 3.1.2 The Doctrine of Precedent Despite the fact that precedent is the most important source of the contract law in the Common law legal tradition and it is also an essential aid in solving international trade disputes under UNIDROIT International Commercial Contracts, precedent does not play an important role in the Chinese contract law system at all. In PRC, not all court decisions or cases are published and available to the public. In fact, the large majority remains unavailable (X. Wang, 2007). Although the Supreme People's Court, and the Standing Committee of the National People's Congress will occasionally make interpretations of various laws in which ambiguities are at issue, or clarification is deemed necessary by the Communist Party leadership, they are much less common than one would expect of courts in Common Law jurisdictions or international forums would provide. There are reasons that the significance of precedent is not well taken in China. Understanding of these reasons can be helpful to a better understanding of Chinese contract law and its implications to trade. Some of the main reasons are discussed below. Firstly of all, the judicial independence is traditionally a big problem in China. It is worth mentioning that judgments and the publishing of cases are highly political processes, and the courts are normally lack the necessary autonomy to render unbiased decisions that might conflict with Communist Party policy, values, or current laws (Farewell, 2006). Sometimes a case will be chosen to be published in order to make a point, or set an example for the public to build confidence in the judicial system. Other times, cases will be published to demonstrate the "rule of Law" to people from other jurisdictions, or to set forth new policies regarding foreign investment, or the activities of foreigners in China. In this sense, publishing UCL in year 1999 as a supporting measure for China’s consequent WTO entry provides a good example. It is also well know that the government of China exerts strong pressure on the courts in cases to which they believe there is a national policy interest at stake, or to which they believe are politically sensitive. In addition, despite China's recent revisions of criminal law, 6 Article 111-116, PRC Civil Code