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By Jeffrey L. Goldberg

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But the spark that caused the fire seemed to be Judge Li’s opinion on the validity of the local law – intolerable because it was deemed to have broken an unalterable rule: “You may not apply the local law in this case but you should not say so”. This would necessarily raise many legitimate questions that deserve 66 67 See Official Notice of Luo Yang Intermediate People’s Court, Luo Zhong Fa (2003) No. 147. See Supreme People’s Court, “Answer to the High People’s Court of Fujian Province on the Question Which Law Shall Be Applied When in Administrative Cases the Provisions of Local Law and Regulations Were Inconsistent with the Law and Regulations” on March 11, 1993.

Under the Notice, the calculating formula for the sale price of seeds is set as “sale price ϭ (cost of purchase ϩ seed-selecting process fee) ϫ (1 ϩ rate of composite deviation) ϩ tax”. On July 8, 2000, “the Seeds Law of the People’s Republic of China” was adopted, and it went to effect December 1, 2000, which repealed the “Regulation of Seeds Administration of the People’s Republic of China” promulgated by the State Council on March 13, 1989. The Seeds Law is silent about the price of purchase and sale of seeds, and in addition, the price category made by the State Commission of Planning and other relevant departments of the State Council does not make the price of corn seeds the State fixed price or State guiding price.

The fundamental principle of the economic theory in contract is that if voluntary exchanges are permitted, resources will gravitate toward their most valuable users. See Anthony T. Kronman, The Economics of Contract Law, 1–2 (Little, Brawn & Company, 1979). See Wang Liming, Study on Contract Law, Vol. 1, 56–57 (People’s University Press, 2003). See Contract Law, art. 1.

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