Zhang Yuging-Huang Danhan 4. Extinction of the right to avoid the contract The issue of the extinction of the right to avoid the contract was not addressed in China's three former Contract Laws,whereas the new Contract law does set forth rules on this point in Article 55.The UNIDROIT Principles deal with this issue on one occasion (Article 3.12),stipulating: "If the party entitled to avoid the contract expressly or impliedly confirms the contract after the period of time for giving notice of avoidance has begun to run,avoidance of the contract is excluded." Reflecting the same principle,the new Contract Law stipulates that a party loses its right to avoid the contract when it makes a statement or performs an act to waive its right after it has become aware of the causes for avoidance.It also covers the situation where a party entitled to avoid the contract fails to exercise its right within one year from the day it became aware or ought to have become aware of the causes for avoidance.This was done in order to encourage the party entitled to avoid the contract to exercise its right without undue delay. 5. Compensation for loss Article 113 of the new Contract Law provides that "where a party to a contract fails to perform the contract obligations or its performance fails to satisfy the terms of the contract and causes loss to the other party,the amount of compensation for loss shall be equal to the loss caused by the breach of contract,including any benefit derived from the performance of the contract,provided such amount does not exceed the probable loss caused by the breach of contract which was foreseen or which ought to have been foreseen by the party in breach when it concluded the contract. In its treatment of compensation for loss,the new Chinese law does not go as far as the UNIDROIT Principles in Articles 7.4.2 (Full compensation),7.4.3(Certainty of harm),7.4.4 (Foreseeability of harm),7.4.5 (Proof of harm in case of replacement transaction),7.4.6 (Proof of harm by current price).For example,the new Contract Law does not touch upon issues such as future harm or loss of a chance,which are contemplated by the UNIDROIT Principles as a compensable loss,although when the amount of damages cannot be established with a sufficient degree of certainty,it is left to the discretion of the court.Likewise,the new Contract Law is silent on compensation for non-pecuniary harm,unlike the UNIDROIT Principles which explicitly point out that harm sustained as a result of non-performance may indeed be non-pecuniary and include physical suffering or emotional distress. 6. Interpretation of contracts The UNIDROIT Principles pay much attention to the interpretation of contracts, providing a whole series of general rules in Chapter IV.Although the new Contract Law contains only one Article (Article 125)relating to interpretation,this is nevertheless great progress compared to the three former Contract Laws,which were completely silent on the matter.Much in line with the UNIDROIT Principles,according 438 Unif.L.Rev.2000-3Zhang Yuqing – Huang Danhan 438 Unif. L. Rev. 2000-3 4. Extinction of the right to avoid the contract The issue of the extinction of the right to avoid the contract was not addressed in China’s three former Contract Laws, whereas the new Contract law does set forth rules on this point in Article 55. The UNIDROIT Principles deal with this issue on one occasion (Article 3.12), stipulating: “If the party entitled to avoid the contract expressly or impliedly confirms the contract after the period of time for giving notice of avoidance has begun to run, avoidance of the contract is excluded.“ Reflecting the same principle, the new Contract Law stipulates that a party loses its right to avoid the contract when it makes a statement or performs an act to waive its right after it has become aware of the causes for avoidance. It also covers the situation where a party entitled to avoid the contract fails to exercise its right within one year from the day it became aware or ought to have become aware of the causes for avoidance. This was done in order to encourage the party entitled to avoid the contract to exercise its right without undue delay. 5. Compensation for loss Article 113 of the new Contract Law provides that “where a party to a contract fails to perform the contract obligations or its performance fails to satisfy the terms of the contract and causes loss to the other party, the amount of compensation for loss shall be equal to the loss caused by the breach of contract, including any benefit derived from the performance of the contract, provided such amount does not exceed the probable loss caused by the breach of contract which was foreseen or which ought to have been foreseen by the party in breach when it concluded the contract.“ In its treatment of compensation for loss, the new Chinese law does not go as far as the UNIDROIT Principles in Articles 7.4.2 (Full compensation), 7.4.3 (Certainty of harm), 7.4.4 (Foreseeability of harm), 7.4.5 (Proof of harm in case of replacement transaction), 7.4.6 (Proof of harm by current price). For example, the new Contract Law does not touch upon issues such as future harm or loss of a chance, which are contemplated by the UNIDROIT Principles as a compensable loss, although when the amount of damages cannot be established with a sufficient degree of certainty, it is left to the discretion of the court. Likewise, the new Contract Law is silent on compensation for non-pecuniary harm, unlike the UNIDROIT Principles which explicitly point out that harm sustained as a result of non-performance may indeed be non-pecuniary and include physical suffering or emotional distress. 6. Interpretation of contracts The UNIDROIT Principles pay much attention to the interpretation of contracts, providing a whole series of general rules in Chapter IV. Although the new Contract Law contains only one Article (Article 125) relating to interpretation, this is nevertheless great progress compared to the three former Contract Laws, which were completely silent on the matter. Much in line with the UNIDROIT Principles, according