In principle, the adjudication of civil cases is based on specific provisions of the law. However, given the extensive scope of civil law, there remain circumstances in which no explicit legal provisions exist. In such cases, the Court shall determine the applicable basis for adjudication according to the following order of priority and legal effect:
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Application of statutory provisions.
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Application of custom in cases where no statutory provisions are available.
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Application of legal analogy in the absence of both statutory provisions and applicable custom.
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Application of the fundamental principles of civil law, case law, and equity in circumstances where neither custom nor legal analogy can be applied.
Application of Custom
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Custom refers to rules of conduct with clear and specific content, establishing the rights and obligations of individuals and legal entities in particular civil relations, which are formed and repeated over a long period of time and widely recognized and applied within a region, community, ethnic group, or within a particular civil domain.
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The Court shall apply custom to resolve civil cases where the parties have no agreement and the law contains no applicable provision, provided that such custom is not contrary to the fundamental principles of civil law.
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Parties to a civil case have the right to invoke custom as a basis for the Court’s consideration and application.
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The Court bears the responsibility to verify the applicability and validity of the invoked custom in accordance with the law.
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In the event that the parties invoke different customs, the applicable custom shall be that which is recognized at the place where the civil relation giving rise to the dispute occurred.
Application of Legal Analogy
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The Court shall apply legal analogy to resolve civil cases in the absence of an agreement between the parties, statutory provisions, and applicable custom.
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In applying legal analogy, the Court must clearly determine:
(i) the legal nature of the civil case;
(ii) the fact that no legal norm exists within the current legal system to govern such relation; and
(iii) the specific legal norm that regulates a civil relation of analogous nature.
Application of Fundamental Principles of Civil Law, Case Law, and Equity
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The Court shall apply the fundamental principles of civil law, case law, and equity to resolve civil cases where no custom or legal analogy is applicable.
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The fundamental principles of civil law are provided under the Civil Code 2015, including:
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All individuals and legal entities are equal; no one may be discriminated against for any reason; all enjoy equal legal protection in respect of personal and property rights.
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Individuals and legal entities establish, perform, and terminate their civil rights and obligations on the basis of free and voluntary commitment and agreement. All commitments and agreements not contrary to prohibitions of the law and not contrary to social morality shall be binding on the parties and respected by other subjects.
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Individuals and legal entities must establish, perform, and terminate their civil rights and obligations in good faith and with honesty.
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The establishment, performance, and termination of civil rights and obligations must not infringe upon the interests of the State, the nation, the public, or the lawful rights and interests of others.
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Individuals and legal entities shall bear liability for failure to perform, or improper performance of, their civil obligations.
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Case law shall be studied and applied by the Court in resolving civil cases once selected by the Council of Judges of the Supreme People’s Court and published by the Chief Justice of the Supreme People’s Court.
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Equity shall be construed on the basis of commonly recognized reasonableness, consistent with humanitarian principles, impartiality, and equality of rights and obligations of the parties involved in the civil case.
Legal Grounds:
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Articles 3, 5, and 6 of the Civil Code 2015;
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Article 45 of the Civil Procedure Code 2015.
