2.       Customary Business Practice

In terms of customary business practice, itmainly contains two types. The first type is the general practice in anycertain business domain or the particular transaction location. In thiscontext, the Chinese court considers that parties in the particular transactionknow or ought to know the relevant general practice. In other words, if oneparty demonstrates that the practice has been recognized generally in thespecific business domain or location, the other party has to comply with thispractice.

The second type is deemed to be custom andpractice. Generally speaking, this is the practice has been employed by bothparties in their previous transactions.[1]

However, the recognition of a customarybusiness practice must satisfy a condition precedent which is that thispractice shall not violate the public order and good customs.[2] Asregards the criteria of the public order and good customs, the Chinese lawleaves the discretion to judges based on specific facts of individual cases.

3.       Guiding Case

It should be noted that, as a civil lawcountry, the primary source of law is legislation, following by customarybusiness practice. There is no tradition of case law jurisprudence; nor isthere any doctrine of precedent as in common law, but there is an increasingtendency in Chinese courts to provide explanatory guidance through judicialdecisions to provide interpretations on relevant legislation. In particular,the SPC issued Detailed Rules for theImplementation of the Provisions on Case Guidance in 2010. The purpose ofthe Detailed Rules is to set up a case guidance system. Although the effect ofa guiding case cannot be overvalued compared with legislation, the guidingcases issued by the SPC officially become the source of law in China so thatthe People’s courts at all tiers shall refer to this published guiding casewhen adjudicating a similar case.[3]

Apart from the above guiding case, theChinese practitioners and judges are also familiar with the concept of “typicalcases” owing to the fact that the SPC has published “typical cases” in itsofficial publications, namely the Gazette of the Supreme People’s Court since1987. These “typical cases” are published alongside judicial interpretations,regulations and speeches regarding the specific legal issues so that these“typical cases” have gained some authoritative weight in legal practice.[4]The difference between guiding cases and typical cases is that, in light of theSPC interpretations, the former shall usually be cited expressly in judicialdecisions, while the latter is normally not mentioned in the judicialdecisions. This, however, does not impact on the importance of typical cases inlegal practice. Apart from the typical cases published by the SPC’s Gazette,other SPC’s judicial decisions published by the SPC webpage also play animportant role in judicial practice. In this context, from a broad perspective,typical cases and the SPC’s judgments might be regarded as part of guidingcases.

4.    Jurisprudence

In considering jurisprudence being the source of law,this is the last stage. If all the legislation, customary business practice andguiding cases cannot dispose of a legal issue, the jurisprudence has to beconsidered. To this author’s experience and observations, the implication andscope of jurisprudent itself are complex. From a broad point of view, anyspecific provisions in legislation must and have reflected the implication ofjurisprudent. Furthermore, even if the specific provisions are silent, theimplication of jurisprudent can contribute to making a judgement. From a narrowpoint of view, jurisprudent can be regarded as general principles inlegislations. For example, principles of fairness and good faith in GeneralRules of the Civil Law are derived from jurisprudent. In legal practice, theChinese judges tend to apply principles to address the legal issues whichcannot be clarified by express provisions in legislations.


[1] As regards “customarybusiness practice”, it has been clarified by the Interpretation II of ContractLaw. Article 7 is provided that “ 1) the practice which is universally adoptedat the place of transaction or in a certain field or sector and is known orshould be known by the other party to the transaction when the contract isconcluded; and 2) the customary practice often used by both parties.”

[2] In accordance with GeneralRules of the Civil Law of the People’s Republic of China (2017), Article 10 isprovided that “Any civil dispute shall be resolved in accordance with the law,in the absence of relevant provisions set forth in law, usual practice may befollowed, but the public order and good customs shall not be infringed upon.”

[3] See Article 7, Provision ofthe SPC Concerning Work on Case Guidance. It is provided that “People’s courtsat all levels should refer to the Guiding Cases released by the SupremePeople’s Court when adjudicating similar cases.”

[4] See Mark Jia, Chinese Common Law? Guiding cases andJudicial Reform, Vol. 129 Harv. L Rev. 2213 [2016], at pp. 2213-2234; EricC. Ip. The Supreme People’s Court and thePolitical Economy of Judicial Empowerment in Contemporary China,Vol. 24,No. 2, Colum J. Asian L. [2011], at pp. 367- 436.


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