Advertisements of rewards for the return of lost or stolen property are commonly regarded as offers at common law. This should be distinguished from advertisements intended to lead to the making of bilateral contracts (e.g. an advertisement of a supermarket offering to sell biscuits at a discount), which are not offers. What is the position of Chinese contract law? Please go through the following Case Study.
Case Study 1.1
John asks Peter to take delivery of certain goods on his behalf, and gives Peter the cargo receipt. Peter takes away the cargo receipt and puts it in a bag, but he forgets the bag when he goes to his office by bus. Mary sees the bag being left on a seat of the bus and takes it away.
Peter later places a reward advertisement in the newspaper: ‘Anyone who returns the bag will be awarded $15,000.’ Mary reads the advertisement and returns the bag to Peter. Do you think the advertisement constitutes a valid offer in Chinese law?
In Chinese law, a reward advertisement is a unilateral juristic act. Article 57 of the General
Principles of Civil Law provides:
A civil justice act shall be legally binding once it is instituted. The actor shall not alter or rescind his act except in accordance with the
law or with the other party’s consent. In the above example, the offer is valid, and Peter is bound to pay the reward of $15,000.
Article 112 of the Property Law (also translated as the ‘Real Right Law’) confirms the validity of advertisements of rewards: The right holder of the object, when obtaining a lost-and-found object, shall pay the person who finds the object or the related department such necessary expenses as the cost for safekeeping the object. Where a right holder promises to offer a reward for finding the object, he shall, when claiming the object, perform the obligation of granting the reward. Where the person who finds the object misappropriates the lost object, he/she shall be deprived of the right to ask for paying the expenses he/she has paid for safekeeping the object or require the holder to perform the obligation as promised.
It is important to know whether an advertisement of rewards constitutes a unilateral juristic act or a contract in Chinese law for the following reasons:
- In the above example, assuming that Mary is not aware of the advertisement, will she be entitled to the reward? If the advertisement constitutes a contract, Mary will be entitled to the reward only if she reads the newspaper before she returns the lost property. On the other hand, if it is a unilateral juristic act, she will be entitled to the reward regardless of her knowledge of the advertisement.
- If Mary is of limited civil capacity, say a child of 6, will she be entitled to the reward? If the advertisement constitutes a contract, she will not be entitled to it, because she has no sufficient civil capacity to enter into a contract. However, if it is a unilateral juristic act, she is arguably entitled to the reward.
An advertisement of rewards is generally regarded as a unilateral juristic act in China.
A notice is placed at the entrance of a shopping mall:
Any single purchase of every $1,000 is entitled to one lucky draw ticket.
First prize: $30,000.
Second prize: $20,000.
Ann does not see the notice before she buys a notebook computer for $10,000 at the shopping mall. When she is about to leave the shop, she is given 10 lucky draw tickets. She opens one of the tickets and finds that she has won first prize. The shopping mall refuses to give the prize to her, alleging that there is no valid contract between the shopping mall and Ann. Please discuss.