Contractual negligence under the Civil Code may apply mutatis mutandis to the legal relationship of administrative contracts(Taiwan)

Emily Chueh
The Supreme Administrative Court rendered the 105-Pan-284 Decision of June 2, 2016 (hereinafter, the “Decision”), holding that contractual negligence under the Civil Code may apply mutatis mutandis to the legal relationship of administrative contracts.
According to the facts underlying this Decision, the Appellee’s website made the following announcement: “An examination will be conducted to select a full-time conductor for August 1, 2009 through July 31, 2011 (estimation).” The Appellant signed up for the examination on his own and was informed in the announcement at issue that he was not selected. The Appellee subsequently delivered the announcement at issue in a letter to the Appellant upon his application. Dissatisfied with the announcement at issue, the Appellant filed administrative appeal, which was not accepted, before subsequently bringing this administrative action. In particular, the Appellant held in his secondary claims that since the Appellee’s examination committee members were willful or negligent, the Appellee shall be liable for damages in accordance with Article 149 of the Administrative Procedure Law, to which Article 245-1 of the Civil Code shall apply mutatis mutandis, and Article 224 of the Civil Code. According to the original decision, the secondary claims were rejected on the ground that the provisions of the National Compensation Law shall apply to this portion involving negligence of civil servants and that the above provisions could not apply mutatis mutandis.
According to the Decision, the circumstances in which a special relationship between the parties was established in the preparation or negotiation process for the execution of an administrative contract are not different from those in which private contracts are executed, because the principle of honesty and credibility applies to both circumstances and the parties preparing or negotiating an administrative contract are both required to observe certain contractual obligations. Article 245-1 of the Civil Code does not contradict the nature of an administrative contract and should apply mutatis mutandis to administrative contracts under Article 149 of the Administrative Procedure law. The negligence of an administrative agency under an administrative contract and national compensation liabilities are subject to different legal bases, which have different regulatory objectives and functions. Therefore, an administrative agency’s national compensation liability cannot be used to exclude its liability for contractual negligence under Article 245-1 of the Civil Code. Since the original decision failed to consider this, such portion was reversed and remanded according to the above-mentioned legal argument contained in the Decision.