Social Sciences in China (Chinese Edition)

No. 3, 2025

The Relationship between Department and Local Government Rules and Contract Validity

(Abstract)

Liang Shangshang

China has long adhered to the principle of excluding departmental rules and local government rules when assessing contract validity. However, explicitly recognizing the mandatory provisions of these rules as part of the legal basis for determining contract validity is a more appropriate approach. Such recognition is an inevitable outcome of the coordinated governance of complex societal relations under the Civil Code and other legal sources. Current Chinese legal provisions on the basis for contract validity reveal inherent contradictions: permitting the application of customs—an informal source of law—while rejecting administrative regulations—a formal source—contravenes the hierarchical principles of the source of law system. Similarly, applying the general provisions of public order and good morals while dismissing specific provisions of administrative regulations violates the fundamental interpretive principle of “forbidding the escape into general clauses.” A more prudent reform is to not only expand the applicability of departmental rules and local government rules in contract validity determinations but also extend the legal basis for contract validity to the full scope of “l(fā)aws” as defined by the Legislation Law.