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Article 3 of the Interpretation of the General Principles of Contract of the Civil Code

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Article 3 Where there is a dispute between the parties as to whether a contract is established, and the people's court is able to determine the names or titles, subject matter and quantity of the parties, it shall generally determine that the contract is established. However, unless otherwise provided by law or otherwise agreed by the parties.

  Where it can be determined that a contract has been established on the basis of the provisions of the preceding paragraph, the people's court shall determine the content that is lacking in the contract on the basis of articles 510 and 511 of the Civil Code.

  Where a party claims that the contract is invalid or requests revocation or rescission of the contract, and the people's court finds that the contract is not established, it shall conduct a trial on whether the contract is established as a focal issue in accordance with Article 53 of the Several Provisions of the Supreme People's Court on Evidence in Civil Proceedings, and may re-designate the time limit for presenting evidence according to the specific circumstances of the case.

  【Purpose of the Article】

Article 3 of the Interpretation of the General Principles of Contract of the Civil Code

  This article is about the formation of the contract and the content of the contract.

  【Overview of Provisions】

  Article 470 of the Civil Code, which follows Article 12 of the Contract Law, stipulates the terms that are generally included in a contract, but does not specify the terms that must be present for the formation of a contract. In this regard, Article 1 of the Judicial Interpretation (II) of the Contract Law regards the names or names, subject matter and quantity of the parties as the general requirements for the formation of a contract, but also stipulates that "unless otherwise provided by law or otherwise agreed by the parties", "if the parties fail to reach an agreement on other contents other than those specified in the preceding paragraph of the contract, the people's court shall determine them in accordance with Articles 61, 62 and 125 of the Contract Law". In our view, this provision is still relevant. In addition, although there is a difference between the invalidity of a contract and the invalidity of a contract, when a party claims that the contract is invalid or requests revocation or rescission, etc., and the people's court determines that the contract is not established, it is not appropriate to simply reject the litigation claims of the parties, but should summarize whether the contract is established as the focus of the dispute and make a determination on whether the contract is established in accordance with Article 53 of the Provisions on Evidence in Civil Procedure.

  【Controversial Views】

  Although Article 1 of the Judicial Interpretation of the Contract Law (II) solves the problem of determining the establishment of a contract and the determination of the content of the contract, it also brings the following problems in practice: first, people often describe the transaction process as "bargaining", and the price or remuneration should be an important content, and whether it can be handed over to the people's court to determine through the rules of contract interpretation or presumption, especially if the parties have not negotiated the price or remuneration, and the subject matter of the contract has no market price or it is difficult to determine the market price; It also does not belong to the government pricing or government guidance price that should be implemented in accordance with the law, and whether it is determined that the contract has been established at this time is in line with the true wishes of the parties; Second, the application of the rules of contract interpretation and presumption should be based on the fact that the parties have not expressed their intention to the content of the contract, but in the process of concluding the contract, if there is evidence to prove that the parties have only reached an agreement on the subject, subject matter and quantity of the contract, and in other respects, the two parties have expressed their intention but have not reached an agreement, whether it can be determined that the contract has been established, and then supplement other contents according to the rules of contract interpretation and presumption. In our view, first of all, only when the market price is open and transparent, or the government price or government guidance price should be implemented in accordance with the law, even if the parties have not negotiated the price or remuneration, the contract can be deemed to have been established, otherwise the determination of the contract is not in line with the true will of the parties. Secondly, in addition to the subject, subject matter and quantity of the contract, if the parties consider other contents to be important to them and express their intentions, the two parties must also reach an agreement on such content before the contract can be deemed to be established, and the problem of inconsistent expressions of intent cannot be resolved through the rules of contract interpretation or presumption. Of course, since Article 488 of the Civil Code stipulates that "the content of the promise shall be consistent with the content of the offer", Article 489 stipulates that "if the promise makes non-material changes to the content of the offer, the promise shall be valid and the content of the contract shall prevail in accordance with the content of the offer, even if the parties do not reach an agreement on the non-material content, the conclusion of the contract shall not be affected. In addition, if the parties expressly agree that a contract can only be formed if they agree on a certain content, it should also be considered to be substantive and can only be formed if the parties agree on that content.

  [Understanding and Application]

Article 3 of the Interpretation of the General Principles of Contract of the Civil Code

  The agreement between the parties is a general requirement for the formation of a contract, and the offer and acceptance are the legal tools to determine whether the parties have reached an agreement. Disagreement can be divided into blatant disagreement and hidden disagreement, the latter of which is not the same as a material misunderstanding and should be strictly distinguished.

  1. Criteria for judging consensualness

  According to the provisions of the Civil Code, a legally binding agreement between the parties is reached through an offer and acceptance. On the one hand, the Civil Code requires that the offer not only be specific in terms of content, but also show that the offeror is bound by the acceptance of the offeror (article 472 of the Civil Code), and on the other hand, it requires that the content of the acceptance should be consistent with the content of the offer, and if the offeree makes substantial changes to the content of the offer, it should be understood as a new offer (article 488 of the Civil Code). It can be seen that the Civil Code adopts the so-called "mirror rule" for the conclusion of agreement, but while clearly stating that "the acceptance is an expression of the offeree's intention to agree to the offer" (article 479 of the Civil Code), it also appropriately eases the "mirror rule", which only requires that the promise cannot make substantive changes to the offer, while for non-substantive changes, it clearly stipulates that "the promise shall be valid unless the offeror objects in a timely manner or the offer indicates that it shall not make any changes to the content of the offer". The content of the contract shall be subject to the content of the commitment" (Article 489 of the Civil Code). As to what constitutes a substantive change, the Civil Code states that "changes in the subject matter, quantity, quality, price or remuneration, performance period, place and method of performance, liability for breach of contract and dispute resolution method are substantive changes to the content of the offer" (Article 488 of the Civil Code). In addition, in order to ensure that the agreement reached between the parties is legally binding, the Civil Code also makes clear provisions on the validity, withdrawal, revocation and invalidation of the offer, as well as the manner, duration and effectiveness of the acceptance.

  Although the legal rules used to determine whether the parties have reached a legally binding agreement seem to be sufficiently clear, the practice is complex, and a large number of issues still depend on the interpretation of the judiciary in accordance with the existing rules. For example, Article 472, Paragraph 1 of the Civil Code stipulates that the content of the offer must be specifically determined, but how to determine whether the parties' expression of intent is "specifically determined"? In practice, one view is that since an offer cannot be substantially modified by an offer, the offer must have all substantive content, i.e., the parties' expression of intent must contain all the terms listed in Article 488 of the Civil Code (such as the subject matter, quantity, quality, price or remuneration of the contract, the time limit for performance, the place and method of performance, the liability for breach of contract, and the method of dispute resolution, etc.) in order to be deemed to be an offer. Obviously, this understanding is neither in line with the reality of the transaction nor with the provisions of the Civil Code. Judging from the actual situation of the transaction, a large number of contracts do not have all the substantive contents listed in Article 488 of the Civil Code, and according to Article 510 of the Civil Code, after the contract takes effect, if the parties have not agreed on the quality, price or remuneration, place of performance, etc., or the agreement is not clear, it may be supplemented by agreement; If a supplementary agreement cannot be reached, it shall be determined in accordance with the relevant provisions of the contract or transaction customs. In addition, even if the parties are unable to resolve the issue of determining the content of the contract in accordance with Article 510 of the Civil Code, the content of the contract can be determined in accordance with the provisions of Article 511 of the Civil Code. It can be seen that the substantive content of Article 488 of the Civil Code is not all the terms that must be present in the offer. In our opinion, according to Article 488 of the Civil Code, if the offer already contains a certain substantive content, then the changeee will constitute a substantive change, or if the offer does not contain a certain substantive content, but the offeree's expression of intent contains such substantive content, it should also be regarded as constituting a new offer, but we cannot use the substantive content provided for in Article 488 of the Civil Code as the standard for judging whether an expression of intent constitutes an offer.

  The question is, what are the terms of an offer that can be considered concrete? Theoretically, the constituent parts of legal acts are divided into three elements: elements, constant elements, and even elements. The element refers to the essential part of the legal act, the absence of which would render the legal act invalid. The elements can be further divided into general elements and individual elements: the former is the element that all legal acts must have (such as the subject matter), and the latter is the element that distinguishes a certain type of legal act from other legal acts (such as the price of the sales contract). Even if the parties have not agreed on this, it can be determined according to the nature of the contract or the provisions of the law, unless the parties have abolished or modified it through a special agreement. Occasional elements refer to the contents of the contract that the parties accidentally attach to the contract in addition to the nature of the legal act (such as payment terms, time limits, liquidated damages, etc.). It can be seen that the elements that affect the formation of the contract only refer to the elements, and even if the contract lacks a constant element or an even element, it does not affect the formation of the contract. Accordingly, Article 1 of the Judicial Interpretation (II) of the Contract Law stipulates that: "If there is a dispute between the parties as to whether a contract is established, and the people's court is able to determine the names or names, subject matter and quantity of the parties, it shall generally determine that the contract is established." Except as otherwise provided by law or otherwise agreed by the parties. Where the parties fail to reach an agreement on any content other than the provisions of the preceding paragraph that is lacking in the contract, the people's court shall make a determination in accordance with articles 61, 62, 125 and other relevant provisions of the Contract Law. ”

  In our view, the above-mentioned provisions not only respect the reality of the transaction, but also achieve mutual coordination with other provisions of the Contract Law, thus providing adjudication rules for the determination of the formation of a contract. Considering that the provisions of the Civil Code on the formation of a contract are no different from those of the Contract Law, this article continues to follow the provisions of Article 1 of the Judicial Interpretation (II) of the Contract Law, and makes the same provisions on the elements that must be met for the formation of a contract. It is worth noting that both the Judicial Interpretation of the Contract Law (II) and this Judicial Interpretation adopt the expression "the contract shall generally be deemed to be established", which indicates that the names of the parties, the subject matter and the quantity are only the general elements of the contract, and do not include the individual elements that distinguish a certain type of contract from other types of contracts. In addition, the phrase "provided otherwise by law or otherwise agreed by the parties" is sufficient to indicate that there are exceptions to the above rule. In this regard, even if the contract has the names or titles of the parties, the subject matter and the quantity, the contract is not automatically established, and it is necessary to examine whether there are individual elements that determine the type of contract, because in practice, there may be situations where there is no agreement between the parties for the content of a certain contract, and it cannot be determined in accordance with articles 61, 62 and 125 of the Contract Law, or in accordance with articles 510 and 511 of the Civil Code. For example, if the parties have not agreed on the price or remuneration, and cannot reach a supplementary agreement, and cannot be determined according to the relevant terms of the contract or transaction customs, and there is no market price at the place of performance at the time of conclusion of the contract, as well as the government pricing or government guidance price, how should this situation be handled? In this regard, our view is that the price or remuneration, as an individual element of the contract, usually affects the formation of the contract, especially when people colloquially refer to the negotiation process as "bargaining", which is enough to indicate the importance of the price or remuneration in the transaction. If there is a dispute between the parties regarding the price or remuneration and cannot be resolved through the above means, it can only be considered that the parties have failed to reach an agreement and the contract is not formed.

  In addition, it is worth noting that although the contract will only be invalidated if the offer lacks elements, in the case of an offer containing a constant element or an even element, because the promise cannot change the substantive content of the offer, if the constant element or even element contained in the offer constitutes the substantive content provided for in Article 488 of the Civil Code, whether the parties have reached an agreement on the constant element or even element will also become a factor in judging whether the contract is established. In other words, the elements are only the standard used to judge whether the content of the expression of intent is specifically determined, and the lack of elements in the expression of intent will naturally lead to the invalidity of the contract, but this does not mean that the contract will necessarily be established as long as the parties agree on the elements. When an offer contains other substantive content other than the elements, the contract can only be deemed to be formed if the parties agree on all the substantive content contained in the offer. In this regard, we believe that if the parties have negotiated on other substantive content other than the elements, but have not reached an agreement, the people's court should still find that the contract is not valid.

  II. Types and Determinations of Disagreement

Article 3 of the Interpretation of the General Principles of Contract of the Civil Code

  Theoretically, the situation where the parties have negotiated but have not reached an agreement on all substantive content is called disagreement, and it is considered that disagreement can be divided into overt disagreement and hidden disagreement: the former is also known as conscious disagreement, that is, the parties are aware that the parties are not in agreement, for example, A buys an Audi car from B, but B is only willing to sell a Jetta car; The latter is also known as unconscious disagreement, that is, the parties do not know that the parties' intentions are inconsistent, and most of them occur when the parties' expressions of intention are objectively ambiguous and cannot be excluded by contract interpretation, for example, the parties have signed a contract for the sale of goods and agreed that the goods will be transported from Mumbai to the buyer's location by the ship Peerles, but coincidentally, there are two ships called Peerles, one departing in October and the other departing in December.

  It is worth noting that there is a major difference between hidden disagreement and material misunderstanding: the former is the problem that the contract is not formed due to inconsistent expressions of intent, and the wrong expression of intention does not occur, while the latter is an error of expressions of intent, and the law grants the party with the wrong expression of intent the right of revocation on the basis of determining the establishment of the contract to protect the security of its transaction. [5] Taking a misunderstanding of the nature of an act as an example, a material misunderstanding means that the nature of the act is certain, but one party has a misunderstanding of the nature of the act, so the law gives that party the right of revocation, and the hidden disagreement often occurs when the parties have different understandings of the nature of the act and each has its own justifiable reasons. For example, Zhang San came back from abroad, brought a video camera, and saw that his friend Li Si couldn't put down the camera after inquiring about the price, so he said to Li Si: "You take it". Soon after Li Si took the camera, Zhang San asked Li Si for the price, believing that he had sold the camera to Li Si, and Li Si proposed that Zhang San give it away rather than sell it. In our opinion, at this time, there was neither a sales contract nor a gift contract between Zhang San and Li Si, because although they had their own intentions, their expressions of intent were not the same: Zhang San made an expression of intent to buy and sell, while Li Si made an expression of intent to accept gifts. Since the parties have different understandings of the phrase "you take it" and each has its own legitimate reasons, it cannot be considered that which understanding is correct, so it cannot be considered that the parties have reached an agreement.

  3. The distinction between the invalidity of the contract and the invalidity of the contract

  Article 502 of the Civil Code stipulates that: "A contract established in accordance with law shall take effect upon its establishment, unless otherwise provided by law or otherwise agreed by the parties." In accordance with the provisions of laws and administrative regulations, if the contract shall go through formalities such as approval, it shall be ...... in accordance with its provisions" It can be seen that in the civil law of the mainland, the formation of a contract and the entry into force of a contract are two concepts that are both related and different: on the one hand, the validity of a contract must be premised on the establishment of the contract, and if the contract is not established, it will naturally not take effect; On the other hand, a contract may not be effective if it is established, and for a contract to be effective, it must not only be established "in accordance with law", but also must not be "otherwise provided by law or otherwise agreed by the parties", including the absence of laws and administrative regulations that require the contract to be approved. Obviously, the term "established in accordance with law" in Article 502 of the Civil Code refers to the fact that the contract meets the valid conditions stipulated in Article 143 of the Civil Code, while the term "otherwise provided by law or agreed by the parties" in Article 502 should mean that the law has provided additional conditions for the contract to take effect or that the parties have agreed on other conditions for the contract to take effect, and of course, it also includes laws and administrative regulations stipulating that a contract can only take effect after approval. Considering that "according to law" is a condition that must be met for all contracts to take effect, the effective conditions (validity elements) that must be met for legal acts stipulated in Article 143 of the Civil Code are also known as general effective requirements, while the effective conditions otherwise stipulated in the law or otherwise agreed by the parties can be called special effective requirements because they only exist under special circumstances. The difference between the two is that the lack of a validity element (general validity element) of a contract will result in the contract being invalid, voidable or pending validity, while the lack of a special validity element will result in the contract not taking effect. In this regard, the invalidity of a contract, the revocability or the pending validity of the contract are all concepts corresponding to the validity of the contract, but the non-entry into force of the contract refers to the state in which the contract is valid but has not yet entered into force. Taking a contract subject to approval as an example, before the contract is approved, it may have been established "in accordance with the law", thus creating a "legally binding force" on the parties (Article 465, paragraph 2 of the Civil Code), and the parties not only cannot modify or terminate the contract without authorization (Article 136, paragraph 2 of the Civil Code), but must also perform the obligation to report for approval (Article 502 of the Civil Code), but cannot have the legal effect sought by the parties, that is, neither party can request the other party to perform the main obligations agreed in the contract. It can be seen that the civil law of the Republic of China not only distinguishes between the requirements for the formation of a contract and the requirements for the validity of a contract, but also further distinguishes the requirements for the effectiveness of a contract into the elements of validity (general requirements for validity) and the requirements for special validity, thus providing a legal basis for accurately determining the validity of a contract subject to approval and the validity of a contract with conditions for entry into force and a time limit.

  It is worth noting that, although there is a difference between the formation of a contract and the entry into force of a contract, there is no difference in the consequences between the invalidity of a contract and the invalidity of a contract due to the lack of a valid element (the general requirement for validity), because although a contract is formed but invalid, it also cannot produce any legally binding force. In practice, there are cases where the parties request the people's court to confirm the invalidity of the contract on the grounds that the contract lacks a statutory written form without distinguishing between the requirements for the formation of the contract and the elements of validity (the general requirements for validity), and some people argue that the parties' claims should be dismissed on the grounds that the statutory written form is a requirement for the formation of the contract rather than an effective element (the general requirements for effectiveness), on the grounds that if the contract is invalid, there is no legal basis, and if the contract is not established, it will lead to a judgment that is not requested.

  In our view, although according to the provisions of the civil law of the People's Republic of China, the statutory written form is indeed an element for the formation of a contract rather than a valid element (the general entry into force element), there is no difference in the consequences between a contract being found to be invalid due to the lack of a statutory written form and a contract being invalid due to the lack of a valid element (general effective element). That is, the judgment should be made on this basis, and the parties' claims should not be directly dismissed for fear of exceeding the ruling. Otherwise, it will not only bring about the burden of litigation and seriously waste judicial resources, but also be detrimental to the protection of the legitimate rights and interests of the parties. There are two ways to interpret the path: first, since the formation of a contract is a prerequisite for judging the validity of a contract, and the consequences of the invalidity of the contract are no different from the invalidity of the contract, according to the rule of interpretation of "the lesser is the more important than the obvious", the parties' claim for confirmation of the invalidity of the contract should be understood to include the request for confirmation of the invalidity of the contract when the people's court determines that the contract is not established; Second, according to article 53 of the Provisions on Evidence in Civil Procedure, which stipulates that "in the course of litigation, if the nature of the legal relationship or the validity of the civil act asserted by the parties is inconsistent with the determination made by the people's court based on the facts of the case, the people's court shall take the nature of the legal relationship or the validity of the civil act as the focus of the trial", if the parties claim that the contract is invalid and the people's court finds that the contract is not established, it shall take this as the focus issue and make a judgment based on the trial situation.

  The question is, since there is no difference between the formation of a contract and the invalidity of a contract, what is the point of distinguishing between the formation of a contract and the entry into force of a contract? As mentioned above, the distinction between the formation of a contract and the entry into force of a contract is conducive to accurately defining the validity status of a contract subject to ratification and a contract with entry into force conditions and a time limit. The problem is that, if this is to be achieved only, it is only necessary to distinguish between the elements of validity (the general requirements for validity) and the special requirements for effectiveness, and there is no need to distinguish between the requirements for establishment and the requirements for effectiveness (the requirements for general effectiveness). For this reason, it has been suggested that the reason why it is necessary to distinguish between the requirements for the formation of a contract and the elements of validity (general elements for effectiveness) is that the formation of a contract is a matter of fact judgment, while the validity of a contract is a matter of value judgment. In our view, this view is debatable. Whether a contract is formed or not is a matter of great interest to the parties, and cannot simply be regarded as a matter of fact judgment, but necessarily involves a value judgment (not to mention that the legislator must choose the legislative style adopted for the time when the contract is established, even if the adjudicator makes a judgment on whether the contract is established in the trial of individual cases, it will inevitably involve a value judgment due to a large number of cases involving the application of law), and whether the contract is effective will also involve a factual judgment (such as whether there is a fact of fraud). This will be discussed in detail later, so I will not repeat it here. It should be pointed out here that although there is no difference between the consequences of the invalidity of the contract and the invalidity of the contract, the distinction between the formation of the contract and the validity of the contract still has certain significance, because the elements for the formation of a contract mainly involve positive facts used to determine whether the parties have reached an agreement (such as whether there is an offer, acceptance, etc.) and are closely related to the people's court's determination of the content of the contract, while the effective elements of the contract (general entry into force elements) are aimed at summarizing the negative facts that affect the validity of the contract (such as the contract must not violate the law, In the case of mandatory provisions of administrative regulations or public order and good customs, there must also be no fraud, coercion and other facts) and is closely related to the people's court's judicial review of the content of the contract that has been determined.

  In the case of a dispute over a reinsurance contract between Insurance Company A and Insurance Company B [Beijing Higher People's Court (2016) Jing Min Zhong No. 150], the plaintiff Insurance Company A issued an offer to the defendant Insurance Company B to enter into a reinsurance contract, and Insurance Company B requested Insurance Company A to counterconfirm within 30 days after making substantial amendments to the offer, but before Insurance Company A made a counter-confirmation, Insurance Company B sent a financial checklist to Insurance Company A, requesting that the premium be checked and payment within a time limit. The financial checklist not only included the reinsurance items involved in the case, but the premiums were calculated in accordance with the offer of Insurance Company A. After the occurrence of the insured event, although the two parties communicated on the issuance of the insurance policy, insurance company B did not issue an insurance policy to insurance company A until the trial of the case. The court of first instance held that, in light of the email exchanges between the parties and the fact that insurance company B did not issue an insurance policy, it should be determined that the reinsurance contract was not established, and that the financial reconciliation statement sent by insurance company B to insurance company A was a daily account reconciliation between the two parties, and could not be regarded as the performance of the reinsurance contract by insurance company B. The court of second instance held that insurance company B's sending an email to insurance company A before the expiration of the validity period of the new offer, requesting verification of the agreed reinsurance items and requesting insurance company A to pay within a time limit, without the counterconfirmation of insurance company A, was an act of actual performance of the contract, which was a substantial acceptance of insurance company A's offer, and at the same time invalidated the validity period of insurance company B's new offer and the conditions for requesting insurance company A's counter-confirmation, so the reinsurance contract had been established. In addition, an insurance contract can be established when the parties unanimously express their intentions, and after the insurance contract is concluded, although the insurer shall issue an insurance policy or insurance certificate to the policyholder in a timely manner, the issuance of the insurance policy or insurance certificate is only a legal obligation of the insurer, not a requirement for the formation of the contract. Accordingly, the court of second instance revoked the first-instance judgment and changed the judgment in favor of Hyundai Property & Casualty Insurance Company's claim.

  Obviously, judging from the trial of this case, there is no dispute between the parties that the email sent by insurance company B to insurance company A constitutes a new offer, and the disputed issue is whether the act of insurance company B sending a financial reconciliation statement to insurance company A constitutes a valid commitment to the original offer of insurance company A; In addition, there is also a certain amount of controversy between the parties as to how to legally evaluate the mail exchange between the parties after the occurrence of an insured event. Of course, the answer to the former question will inevitably affect the answer to the latter question. In our view, the dispute between the parties on the former issue is closely related to the provisions of the civil law of the mainland. For example, the Civil Code, which inherits the provisions of the Contract Law, regards "substantial changes made by the offeree to the content of the offer" as one of the circumstances under which the offer becomes invalid (Article 478, Paragraph 4 of the Civil Code). As a result, the original offer made by Insurance Company A will lapse due to the material changes made by Insurance Company B to the content of the offer. Since the original offer has lapsed, it is doubtful whether the act of insurance company B issuing a financial reconciliation statement to insurance company A constitutes a valid undertaking. On the other hand, since the act of insurer B making a substantial change to the contents of the offer constitutes a new offer, the new offer can also be revoked before insurer A makes an undertaking, so it is doubtful whether insurer B's act of issuing a financial reconciliation statement to insurer A can be construed as a revocation of the new offer. In addition, even if the new offer is considered to have been withdrawn, it is doubtful whether it means that the original offer made by Insurance Company A does not lapse and can still be the subject of the acceptance. The court of first instance did not answer the above questions, but held that the financial checklist issued by insurance company B to insurance company A was only a routine accounting, and it could not be inferred that the parties had reached an agreement on the main terms of the reinsurance project involved in the case, and insurance company A did not make a valid commitment within the commitment period, so the contract was not established. The court of second instance indirectly answered the above question, because the judgment of the second instance held that the act of issuing a financial checklist by insurance company B to insurance company A not only revoked the new offer issued by insurance company B, but also constituted an acceptance of the original offer of insurance company A, which means that the original offer has not expired and can still be the object of acceptance. It can be seen that this process contains not only a large number of factual judgments, but also value judgments made by judges on facts. For example, how to legally characterize the act of issuing a financial checklist from insurance company B to insurance company A is a question that includes a value judgment. In the opinion of the court of first instance, the act did not contain an expression of intent to revoke a new offer, nor did it contain an expression of intent to commit to the original offer, but was only a routine accounting act. However, the court of second instance held that the act included not only an expression of intent to revoke a new offer, but also an expression of intent to commit to the original offer.

  It can be seen that the formation of a contract involves the interpretation of the expression of intent, that is, the adjudicator's legal evaluation of the facts of the case, so it is also closely related to the adjudicator's interpretation of the law. This requires that the referee's gaze must go back and forth between the facts and the norms. This book is not intended to evaluate the value judgments made by the courts of first and second instance, but to take this opportunity to point out that the formation of a contract is not only a matter of fact judgment, but also a matter of value judgment. In this process, the judge has to interpret not only the existing law, but also the legal evaluation of a large number of facts, so the eyes must go back and forth between the norms and the facts. For example, the court of second instance understood the issuance of an insurance policy as a legal obligation after the formation of an insurance contract, rather than an essential element for the formation of an insurance contract, which is sufficient to show that distinguishing whether a certain matter is an element of the formation of a contract or a legal obligation after the conclusion of a contract is also of great significance for determining whether the contractual relationship between the parties is established. In addition, the court of first instance's interpretation of the email exchange between the parties after the occurrence of the insurance accident as proof that the parties did not reach an agreement, while the court of second instance's interpretation of the conduct between the parties as an act of performance of the contract is also sufficient to prove that the judge may have different results when evaluating the facts.

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