Contracts serve as the foundation for the orderly operation of a market economy. However, in market transactions, illegal activities, especially contract-related illegal activities, occur from time to time, which not only damage national interests and public interests, undermine market fairness, but also squeeze out the living space of law-abiding operators, and even result in the "bad money drives out good money" phenomenon. Maintaining market order is the basic responsibility of market regulation authorities. To implement the provisions of the Civil Code and further promote the in-depth development of contract administrative supervision work, on May 18, 2023, the State Administration for Market Regulation issued Order No. 77, which promulgated the "Contract Administrative Supervision and Management Measures" (hereinafter referred to as the Management Measures), which has been formally implemented since July 1, 2023.

1. Issuance of Contract Administrative Supervision and Management Measures--It is Time to Bravely Pursue the Declining Enemy with Innovation

We searched the Alpha Legal Database using "Measures for the Supervision and Handling of Contract Illegal Activities" (hereinafter referred to as the Handling Measures) as keywords, selecting the period around 2020 to the present as the sampling node, as of July 21, 2023. As shown in the figure below, cases of administrative penalties for contract violations show a trend of decreasing year by year. Precisely because the "Handling Measures" effectively curbed contract illegal activities in the market, the State Administration for Market Regulation revised the "Handling Measures" implemented in 2010 and issued the "Contract Administrative Supervision and Management Measures."

2. Impact of the Contract Administrative Supervision and Management Measures--Do Not Follow the Example of the "Hegemon"

In daily life, consumers are often in a weak position due to information asymmetry, and various types of "unfair contract terms" can frequently be seen.

So, what are the common unfair contract terms in daily life?

(1) The right of final interpretation belongs to **the merchant

When we shop, recharge for cards, travel, etc., we often see that many merchants print "The right of final interpretation belongs to **the merchant" on coupons, vouchers, prepaid cards, and other documents. By having the right of interpretation belong to them, merchants aim to shirk responsibility. Does the right of interpretation really belong to them? Illegal!

The party started providing beauty, hairdressing, and other services at B2F, No. 999, Dongdaming Road, Hongkou District, Shanghai since July 10, 2021. On September 15, 2021, the party began selling a consumer card, and the back of the card was printed with "The right of interpretation of this card belongs to ***the merchant," where "***Modeling" is the abbreviated name of ***company's store sign.

Because the operator's above conduct excluded the consumer's right to interpret standard contract terms, the Market Supervision Bureau imposed a penalty of 2,000 yuan.

(2) Prepaid fees are non-refundable?

Various merchant platforms frequently launch services where consumers pay fees in advance to enjoy services, and the card balance may include recharge bonuses. However, while enjoying the convenience of services, merchants make unfair agreements with consumers through contracts, such as non-refundable card balances. The money is spent, the card is registered, and no refunds are possible? Illegal!

On August 17, 2022, law enforcement personnel conducted an enforcement inspection on Shanghai ***Beauty and Hairdressing Co., Ltd. located at No. 1077, Shuiddian Road, Hongkou District, Shanghai. They found that the back of the VIP haircut card used by the party stated "Once this card is sold, it cannot be returned, and the card balance cannot be exchanged for cash; use it until it is exhausted."

It was determined that since 2022, the party had been using this version of the fixed-format VIP haircut card. When consumers decided to accept the VIP haircut card provided by the party, the back of the card was marked with "Once this card is sold, it cannot be returned, and the card balance cannot be exchanged for cash; use it until it is exhausted."

Because the party's above conduct violated the provisions excluding consumers' rights to legally modify or terminate contracts, the Market Supervision Bureau decided to order the party to make corrections and imposed an administrative penalty of a fine of RMB 500 yuan.

(3) Unilateral determination of abnormal users?

From January 2022 to the case closed, the party **Yang Liquor (Shanghai) Co., Ltd. used this version of "Shopping Notice Screenshot in Product Details" to sell "Macallan" liquor products. This agreement contains: "According to the platform shopping rules and the prompts on the product page, for orders suspected of violating purchase quantity limits based on system determinations of the same or similar customers, IDs, payment, delivery information, etc., or other abnormal orders, our company may take measures such as not shipping, canceling orders, or taking other reasonable measures."

Because the party's above conduct excluded consumers from interpreting standard contract terms through undisclosed internal regulations, which constitutes an illegal act of excluding consumers' right of interpretation as stipulated by laws and regulations, a fine of RMB 10,000 yuan was imposed.

(4) Our store assumes no responsibility?

Shanghai **Grand Hotel Co., Ltd. is mainly engaged in catering and accommodation services. Starting from early April 2006, at the party's business premises located at No. 888, Xinhuan Road, Hengsha New Town, Chongming District, Shanghai, the party externally used guest accommodation registration forms marked with "Guest Notice: For any belongings not stored with our store for safekeeping, in case of theft or other accidental losses, our store assumes no responsibility," which were used to register guest information. The registration form contained information expressions such as "our store assumes no responsibility." On November 23, 2022, the above illegal conduct of the party was discovered by this bureau. From April 2006 to the case closed, the party cumulatively used the above registration forms to provide accommodation services for 139 consumers, and the party did not obtain any illegal gains from the above standard contract terms.

Because the operator exempted themselves from liability for property losses to consumers caused by their own intentional acts or gross negligence in standard contract terms, the Market Supervision Bureau decided to impose an administrative penalty of a fine of RMB 500 yuan.

In daily life, terms that exclude or limit consumer rights and exempt operators from obligations are common. Only some examples are listed above. Of course, there are also terms such as: "Membership benefits cannot be sold or transferred""Due to this product being a promotional item, refunds are not supported""Custom-made clothing must be picked up within one month; our store assumes no responsibility after expiration", "The right to modify or discontinue services does not require prior notice to users", and other "unfair" terms. If consumers encounter the above-mentioned "unfair" terms, they can promptly complain to the relevant market regulation authorities to safeguard their legitimate rights and interests.

3. Vision of the Contract Administrative Supervision and Management Measures--Contract Fairness Promotes Transaction Fairness

In the current environment where operators and consumers freely enter into contracts, some operators, due to their dominant position, engage in the phenomenon of "bullying customers like a hegemon," which to varying degrees damages or even excludes consumers' legitimate rights and interests. The introduction of the "Contract Administrative Supervision and Management Measures" restricts operators' conduct, protects consumers' rights, and guides market transaction entities to adhere to fairness principles when signing contracts, thereby achieving transaction fairness through contract fairness.

The orderly operation of the market economy cannot be achieved without everyone's joint efforts. Maintaining market order is the basic responsibility of market regulation authorities, but it also cannot be achieved without operators' self-improvement and consumers' active participation. Operators should proactively revise illegal, non-compliant, and unreasonable "unfair contract terms"; consumers should also actively participate and promptly complain to the relevant market regulation authorities about operators' illegal and non-compliant conduct.