This chapter examines two closely connected issues in defining the contents of contracts in China: first, the approaches adopted in interpreting the meaning of agreed contractual terms and, second, to what extent additional terms are implied to supplement the express terms. It discusses the underlying philosophy of interpretation with regard to the dichotomy of ‘objective’ and ‘subjective’ approaches; it details the various interpretative aids, such as customs, usages, the commercial background, and the negotiations of the parties; and it shows how Chinese law resolves the tension between literalist and contextualist approaches to interpretation. A number of hypothetical scenarios illustrate how Chinese courts deal with issues of contractual interpretation and gap-filling in practice.
