中华人民共和国合同法（1999）主席令第十五号（1999年3月15日第九届全国人民代表大会第二次会议通过 1999年3月15日中华人民共和国主席令第15号公布 自1999年10月1日起施行）
Contract Law of the People's Republic of China
Presidential Decree No. 15
（1999年3月15日第九届全国人民代表大会第二次会议通过 1999年3月15日中华人民共和国主席令第15号公布 自1999年10月1日起施行）
(Adopted at the Second Session of the Ninth National People 's Congress on March 15, 1999 and promulgated by the Order of the President of the People's Republic of China No.15 on March 15, 1999)
Chapter 1 General Provisions
Article 1 This Law is formulated for the purposes of protecting the legitimate rights and interests of the parties to contracts, safeguarding social and economic order and promoting socialist modernisation.
Article 2 A contract in this Law refers to an agreement among natural persons, legal persons or other organizations as equal subjects for the establishment, modification of a relationship involving the civil rights and obligations of such entities.
Agreements concerning personal relationships such as marriage, adoption, guardianship, etc. shall be governed by the provisions in other laws.
Article 3. The parties to a contract shall have equal status in law. Neither party may impose its will on the other party.
Article 4 Parties have the right to lawfully enter into a contract of their own free will in accordance with the law, and no entity or individual may illegally interfere therewith.
Article 5 The parties shall observe the principle of fairness in defining their respective rights and obligations.
Article 6 The parties shall observe the principle of good faith in exercising their rights and performing their obligations.
Article 7 In concluding and performing a contract, the parties shall comply with the laws and administrative regulations, respect social ethics, and shall not disturb the social and economic order or harm public interests.
Article 8 A contract entered into in accordance with the law is legally binding on the parties. The parties shall perform their respective obligations as agreed, and shall not unilaterally modify or rescind the contract.
A contract established in accordance with the law is protected by law.
Chapter 2 Conclusion of Contracts
Article 9 In entering into a contract, the parties shall have appropriate capacity for civil rights and capacity for civil conduct.
A party may authorize an agent to enter into a contract.
Article 10 The parties may conclude a contract in written, oral or other forms.
A contract shall be in written form if the laws or administrative regulations so provide. The contract shall be in written form if the parties so agree.
Article 11 "Written form" refers to a form such as a contract, letter or electronic data (including a telegram, telex, fax, electronic data interchange and e-mail) that can tangibly express the contents contained therein.
Article 12 The contents of a contract shall be agreed upon by the parties, and shall contain the following clauses in general:
1. titles or names and domiciles of the parties;
2. subject matter;
(V) price or remuneration;
(VI) time limit, place and method of performance;
(VII) liabilities for breach of contract;
(VIII) dispute resolution.
The parties may conclude a contract by reference to a model text for each type of contract.
Article 13 The parties shall conclude a contract in the form of an offer and an acceptance.
Article 14 An offer is a manifestation of intent to conclude a contract with another person. The manifestation of intent shall comply with the following:
1. Specific contents;
(II) it indicates that the offeror will be bound by it upon its acceptance by the offeree.
Article 15 An invitation to offer is an expression of a wish that another person makes an offer to him. Mailed price lists, public announcements of auction and tender, prospectuses and commercial advertisements are invitations to offer.
Where the contents of a commercial advertisement comply with the terms of an offer, it shall be deemed as an offer.
Article 16 An offer becomes effective when it reaches the offeree.
If a contract is concluded through the use of a data message and the recipient appoints a specific system to receive the data message, the time when the data message enters the specific system shall be regarded as the time of arrival; if no specific system is specified, the time when the data message enters any system of the recipient for the first time shall be regarded as the time of arrival.
Article 17 An offer may be withdrawn. The withdrawal notice shall reach the offeree before or at the same time when the offer reaches the offeree.
Article 18 An offer may be revoked. The revocation notice shall reach the offeree before it has dispatched a notice of acceptance.
Article 19 An offer may not be revoked if:
1. the offeror specifies an acceptance period or otherwise expressly indicates that the offer is irrevocable; or
2. the offeree has reasons to believe that the offer is irrevocable and has made preparation for performing the contract.
Article 20 An offer shall be null and void under any of the following circumstances:
1. a notice of rejection reaches the offeror;
2. the offeror revokes the offer in accordance with the law;
(III) the offeree fails to make an acceptance within the time limit for acceptance;
4. the offeree substantially alters the contents of the offer.
Article 21 An acceptance is a manifestation of intent of an offeree to assent to an offer.
Article 22 An acceptance shall be made in the form of a notice, except where, in accordance with the trade practices or as indicated in the offer, an acceptance may be made by conduct.
Article 23 An acceptance shall reach the offeror within the time limit prescribed in the offer.
Where no time limit is fixed in the offer, an acceptance shall reach the offeror in accordance with the following provisions:
1. if the offer is made orally, the acceptance shall be made immediately unless otherwise agreed by the parties;
(II) if the offer is made in a form other than verbal communication, the acceptance shall reach the offeror within a reasonable period of time.
Article 24 Where an offer is made in a letter or a telegram, the time limit for acceptance commences from the date shown in the letter or from the date on which the telegram is handed in for dispatch. If no such date is shown in the letter, the period shall start from the date shown on the postmark for posting. Where an offer is made by means of instantaneous communication, such as by telephone or facsimile, etc., the time limit for acceptance commences from the time the offer reaches the offeree.
Article 25 A contract is established when the acceptance becomes effective.
Article 26 An acceptance becomes effective when its notice reaches the offeror. If an acceptance does not require notification, it becomes effective when an act of acceptance is performed in accordance with trade practices or as required in the offer.
Where a contract is concluded through the use of electronic documents, the time at which an acceptance arrives shall be governed by the provisions of paragraph 2 of Article 16 of this Law.
Article 27 An acceptance may be withdrawn. The notice of withdrawal shall reach the offeror before or at the same time when the notice of acceptance reaches the offeror.
Article 28 Where an offeree makes an acceptance beyond the time limit for acceptance, the acceptance shall constitute a new offer unless the offeror informs the offeree that the said acceptance is effective.
Article 29 If the offeree dispatched the acceptance within the time limit specified for acceptance, and under normal circumstances the acceptance would reach the offeror in due time, but for other reasons the acceptance reaches the offeror after the expiry of the time limit for acceptance, such acceptance shall be effective, unless the offeror informs the offeree in a timely manner that it does not accept the acceptance due to the expiry of the time limit for acceptance.
Article 30 The contents of an acceptance shall be consistent with those of the offer. Where the offeree substantially alters the contents of the offer, this shall be deemed to be a new offer. A modification relating to the subject matter, quantity, quality, price or remuneration, time or place or method of performance, liability for breach of contract or dispute resolution method, etc. constitutes a material modification of an offer.
Article 31. Where the acceptance does not materially alter the contents of the offer, it shall be effective, and the contents of the contract shall be subject to those of the acceptance, except where the offeror objects promptly or the offer indicates that the acceptance does not permit any substantial alteration of the contents of the offer.
Article 32 Where the parties conclude a contract in written form, the contract is established when it is signed or sealed by the parties.
Article 33. Where a contract is concluded by correspondence or electronic documents, either party may, before the contract is concluded, request that a letter of confirmation be signed. This Contract is formed upon the signing of the Confirmation Letter.
Article 34 An acceptance shall take effect at the place of the formation of the contract.
Where a contract is concluded through the use of electronic documents, the main place of business of the recipient of the said documents shall be deemed to be the place at which the contract is concluded; where the recipient does not have a main place of business, the recipient's habitual residence shall be deemed to be the place at which the contract is concluded. Where the parties agree otherwise, their agreement shall be applied.
Article 35 Where the parties conclude a contract in written form, the place where both parties sign or affix their seals on the contract shall be the place of establishment.
Article 36 Where a contract is to be concluded in written form as provided for by laws and administrative regulations or as agreed by the parties, and the parties fail to conclude the contract in written form, but one party has performed the principal obligation and the other party has accepted it, the contract is established.
Article 37 A contract concluded in a written contractual agreement shall be deemed as established if, before the signing or sealing of the contract, one party has performed its principal obligations and the other party has accepted the performance.
Article 38 Where the State, in light of its needs, issues a mandatory assignment or a state procurement order, the relevant legal persons and other organizations shall conclude contracts between them in accordance with the rights and obligations as provided for in the relevant laws and administrative regulations.
Article 39 Where standard terms are adopted in a contract, the party supplying the standard terms shall observe the principle of fairness in defining the rights and obligations of the parties, draw the attention of the other party in a reasonable manner to the terms that exclude or restrict the other party's liabilities, and explain the standard terms at the request of the other party.
Standard terms are clauses which are prepared in advance for repeated use by a party and which are not negotiated with the other party at the time of the conclusion of the contract.
Article 40. Where a standard clause falls within the circumstances stipulated in Articles 52 or 53 of this Law, or where the party which supplied the standard clause exempts itself from its liabilities, increases the liabilities of the other party, or excludes the main rights of the other party, the clause shall be invalid.
Article 41. If a dispute arises over the interpretation of a standard clause, it shall be interpreted in accordance with the usual understanding. Where there are two or more kinds of interpretation, an interpretation unfavorable to the party supplying the standard terms shall prevail. If a standard term is inconsistent with a non- standard term, the non- standard term shall prevail.
Article 42 A party shall be liable for damages if it falls under any of the following circumstances when concluding a contract, thereby causing losses to the other party:
1. negotiating the contract in bad faith under the pretext of concluding a contract;
2. deliberately concealing important facts relating to the conclusion of the contract or providing false information; or
(III) Having any other act violating the principle of good faith.
Article 43. Commercial secrets of which the parties become aware in the course of concluding a contract must not be disclosed or inappropriately used, regardless of whether or not the contract is concluded. If the party discloses or improperly uses such trade secrets, thereby causing any losses to the other party, it shall be liable for damages.
CHAPTER 3 — VALIDITY
Article 44 A contract established in accordance with the law shall become effective upon its establishment. Where laws and administrative regulations provide that ratification, registration and other procedures must be completed before the contract can go into effect, such provisions shall be followed.
Article 45 The parties may agree that the effectiveness of a contract be subject to certain conditions. A contract whose effectiveness is subject to a condition shall become effective upon the occurrence of the condition. A contract with conditions for its dissolution shall become null and void upon satisfaction of such conditions.
Where a party improperly prevents the satisfaction of a condition for its own interests, such condition shall be deemed to have been satisfied. Where a party improperly facilitates the satisfaction of a condition, such condition shall not be deemed to have been satisfied.
Article 46. The parties may agree to attach a time limit to the validity of a contract. The contract with effective term shall come into force at expiration of the term. A contract with a termination period shall become null and void upon the expiration of such period.
Article 47 A contract concluded by a person with limited capacity for civil conduct shall be effective after being ratified retroactively by the person's statutory agent, provided that a purely beneficial contract or a contract concluded corresponding to the person's age, intelligence or mental health condition need not be ratified by the person's statutory agent.
The counterparty may urge the statutory agent to ratify the contract within one month. Where the statutory agent does not respond, subsequent confirmation shall be deemed to have been refused. A bona fide counterparty has the right to revoke the contract before the contract is ratified. The revocation shall be made by giving a notice.
Article 48 Without ratification by the principal, a contract concluded on his behalf by a person who has no power of agency, who oversteps the power of agency, or whose power of agency has expired shall have no binding force on the principal, and the person shall be held liable therefor.
The other party may urge the principal to ratify it within one month. Where the principal does not respond, subsequent confirmation shall be deemed to have been refused. A bona fide counterparty has the right to revoke the contract before the contract is ratified. The revocation shall be made by giving a notice.
Article 49 Where an actor has no power of agency, oversteps the power of agency, or the power of agency has expired and thus concludes a contract in the principal's name, and the other party has reasons to believe that the actor has the power of agency, the said act of agency shall be effective.
Article 50 Where the legal representative or responsible person of a legal person or other organization oversteps the power thereof and concludes a contract, the representative act shall be effective except that the counterpart knows or ought to know that he oversteps the power thereof.
Article 51 A contract under which a person without the right of disposition disposes of the property of another person shall be valid upon the ratification by the person with such right or upon the acquisition of such right by the person without such right after the conclusion of the contract.
Article 52 A contract shall be null and void under any of the following circumstances:
1. a contract is concluded by means of fraud or coercion by one party to the detriment of national interests;
2. malicious collusion is conducted to damage the interests of the State, a collective or a third party;
3. Illegal purposes are concealed under the guise of legitimate forms;
(IV) damaging the public interests;
(V) violating the mandatory provisions of laws and administrative regulations.
Article 53 The following exclusion clauses in a contract shall be null and void:
1. those that cause personal injury to the other party;
(II) those involving property damage to the other party as a result of deliberate intent or gross negligence.
Article 54 A party shall have the right to request a people's court or an arbitration institution to modify or revoke the following contracts:
1. those concluded as a result of serious misunderstanding;
(II) those that were obviously unfair at the time of conclusion.
If a contract is concluded by one party against the other party's true intentions through the use of fraud, coercion or exploitation of the other party's unfavorable position, the injured party shall have the right to request a people's court or an arbitration institution to modify or revoke it.
Where a party requests for modification, the people's court or the arbitration institution may not cancel the contract.
Article 55 The right of revocation shall lapse under any of the following circumstances:
1. the party with the right of revocation fails to exercise such a right within one year from the date when he knows or ought to know the cause for revocation; or
(II) the party with the right of rescission waives such a right by express statement or by its own conduct after knowing the causes of rescission.
Article 56 A contract that is null and void or revoked shall have no legal binding force ab initio. If part of a contract is null and void without affecting the validity of the other parts, the other parts shall remain valid.
Article 57 If a contract is null and void, revoked or terminated, it shall not affect the validity of the clauses on the methods of dispute settlement which exist independently in the contract.
Article 58 The property acquired as a result of a contract shall be returned after the contract is confirmed to be null and void or has been revoked; where the property cannot be returned or the return is unnecessary, it shall be reimbursed at its estimated price. The erring party shall compensate the other party for the losses it suffered as a result of the act; if both sides are in error, they shall each bear their proper share of the responsibility.
Article 59 If the parties have maliciously colluded to damage the interests of the State, a collective group or a third party, the property thus acquired shall be turned over to the State or returned to the collective group or the third party.
Chapter 4 Contract Performance
Article 60 The parties shall fully perform their obligations as agreed.
The parties shall observe the principle of good faith and shall perform such obligations as notification, providing assistance and maintaining confidentiality according to the nature and purpose of the contract as well as trade practices.
Article 61 Where, after a contract becomes effective, there is no agreement in the contract between the parties on such matters as quality, price or remuneration, or place of performance, or such agreement is unclear, the parties may agree upon supplementary terms through consultation; if no agreement is reached, such terms shall be determined in accordance with the relevant provisions of the contract or the transaction practice.
Article 62 Where the relevant terms of a contract are unclear, and cannot be determined in accordance with the provisions of Article 61 of the Law, the following provisions shall apply:
1. if quality requirements are unclear, state standards or industry standards shall apply; if there are no state standards or industry standards, general standards or specific standards in conformity with the purpose of the contract shall apply;
(II) if price or remuneration is not clear, performance shall be in accordance with the prevailing market price at the place of performance at the time the contract was concluded, and if the law requires the implementation of government fixed prices or government guidance prices, performance shall be in accordance with the regulations;
(III) where the place of performance is unclear, if the obligation is payment of money, performance shall be at the location of the party receiving the money; if the obligation is delivery of immovable property, performance shall be at the location of the immovable property; for any other subject matter, performance shall be at the location of the party fulfilling the obligations;
(IV) if the time of performance is unclear, the obligor may at any time fulfill, and the obligee may also demand at any time, performance, provided that a time limit for necessary preparation shall be given to the obligor;
(V) if the method of performance is not clear, performance shall be rendered in a manner which is conducive to realizing the purpose of the contract; and
(VI) if the party responsible for the expenses for performance is unclear, the expenses shall be borne by the party fulfilling the obligations.
Article 63 Where the government-set price or government-guided price is implemented, if the government-set price is adjusted during the delivery period as agreed upon in the contract, the price shall be calculated pursuant to the price at the time of delivery. Where a party delays in delivering the subject matter, the original price shall be adopted if the price rises; and the new price shall be adopted if the price falls. Where a party delays in taking delivery of the subject matter or making payment, the new price shall be adopted if the price rises, and the original price shall be adopted if the price falls.
Article 64 Where the parties agree that the obligor performs obligations for a third party, but the obligor fails to perform the obligations for the third party or the performance does not comply with the terms of the contract, the obligor shall be liable to the obligee for breach of contract.
Article 65 Where the parties agree that a third party performs obligations for the obligee, if the third party fails to perform the obligations or the performance does not comply with the terms of the contract, the obligor shall be liable to the obligee for breach of contract.
Article 66 Where both parties have obligations towards each other and there is no order of priority in respect of the performance of the obligations, the parties shall perform the obligations simultaneously. One party has the right to refuse a request for performance before the other party performs. One party has the right to reject the other party’s corresponding request for performance if the other party’s performance does not comply with the terms of the contract.
Article 67 Where both parties have obligations towards each other and there is an order of priority in respect of the performance of the obligations, if the party which shall render its performance first has not rendered its performance, the party which shall render its performance later has the right to reject the other party's demand for performance. If the performance of the obligation of the party who is to perform first fails to conform to the agreement, the party who is to perform later has the right to reject the corresponding request for performance.
Article 68 The party which shall render its performance first may suspend its performance if it has conclusive evidence that the other party falls under any of the following circumstances:
1. its business is seriously deteriorating;
(II) Transferring its property or withdrawing its capital to evade its debts;
(III) the other party loses its business reputation; or
(IV) other circumstances where the other party loses or is likely to lose its ability to perform its obligations.
Where a party suspends performance without conclusive evidence, it shall be liable for breach of contract.
Article 69 Where a party suspends performance in accordance with Article 68 hereof, it shall timely notify the other party. Where the other party provides an appropriate guarantee, the other party shall resume performance. After the performance is suspended, if the other party fails to regain its ability to perform its obligations and fails to provide appropriate security within a reasonable period, the suspending party may terminate the contract.
Article 70 Where the obligee fails to notify the obligor of its division, merger, or change of domicile, thereby making it difficult for the obligor to perform its obligations, the obligor may suspend its performance or have the subject matter in escrow.
Article 71 The obligee may reject the obligor's advance performance of its obligations, except that the advance performance does not harm the obligee's interests.
Any additional expense incurred by the obligee due to the obligor's advance performance of its obligations shall be borne by the obligor.
Article 72 The obligee may reject the obligor's partial performance, except that the partial performance of its obligations does not harm the obligee's interests.
Any additional expense incurred by the obligee from the obligor's partial performance shall be borne by the obligor.
Article 73 Where the obligor is remiss in exercising its due creditor's right, thereby harming the obligee's interests, the obligee may petition the People's Court for subrogation in its own name, except that the creditor's right exclusively belongs to the obligor.
The scope of subrogation shall be limited to the creditor's rights. The necessary expenses incurred by the obligee in exercising the subrogation shall be borne by the obligor.
Article 74 Where the obligor waives its creditor's right against a third party that is due or assigns its property without reward, thereby harming the obligee's interests, the obligee may petition the People's Court for cancellation of the obligor's act. Where the obligor assigns its property at a low price which is manifestly unreasonable, thereby harming the obligee's interests, and the assignee is aware of the situation, the obligee may also petition the People's Court for cancellation of the obligor's act.
The extent to which the right to cancel can be exercised is limited to the rights of the obligee. The necessary expenses incurred by the obligee in exercising the right of revocation shall be borne by the obligor.
Article 75 The right of revocation shall be exercised within one year from the date the obligee knows or ought to know the cause for revocation. If the right of revocation is not exercised within five years from the date the act of the obligor occurs, the said right of revocation shall be extinguished.
Article 76 Once a contract becomes effective, neither party may refuse to perform its obligations thereunder due to a change in its name, or its legal representative, the person in charge, or the person handling the contract.
Chapter 5 Modification and Assignment of Contracts
Article 77 A contract may be modified if the parties reach a consensus through consultation. Where the laws and administrative regulations provide that ratification, registration and other procedures must be completed when a contract is altered, such provisions shall be followed.
Article 78 Where an agreement by the parties on the contents of a modification is ambiguous, the contract shall be presumed as not having been modified.
Article 79 The obligee may assign, in whole or in part, its rights under a contract to a third party, except under the following circumstances:
1. such rights may not be assigned in light of the nature of the contract;
(II) such rights may not be assigned according to the agreement between the parties;
(III) such rights may not be assigned according to the provisions of the law.
Article 80 Where the obligee assigns its rights, it shall notify the obligor. Such assignment will have no effect on the obligor without notice thereof.
The obligee's notice of assignment of rights shall not be revoked, except with the consent of the assignee.
Article 81 Where the obligee assigns its right, the assignee shall acquire the collateral rights related to the principal rights, except that the collateral rights exclusively belong to the obligee.
Article 82 Upon receipt of the notice of assignment of the claims, the obligor may assert against the assignee any defenses it has against the assignor.
Article 83 Upon receipt by the obligor of the notice of assignment of rights, the obligor shall have vested rights against the assignor, and if the rights of the obligor vest prior to or at the same time as the assigned rights, the obligor may claim an offset from the assignee.
Article 84. Where the obligor assigns its contractual obligations in whole or in part to a third party, it must obtain the consent of the obligee.
Article 85 If the obligor delegates its obligation, the new obligor may exercise any defense that the original obligor had against the obligee.
Article 86 Where the obligor delegates its obligation, the new obligor shall assume the incidental obligations related to the main obligations, except that the obligations exclusively belong to the original obligor.
Article 87 Where the laws or administrative regulations provide that the assignment of rights or transfer of obligations shall be subject to approval or registration procedures, such provisions shall apply.
Article 88 With the consent of the other party, one party may transfer its rights together with its obligations under contract to a third party.
Article 89 Where the rights and obligations are transferred together, the provisions in Articles 79, Articles 81 to 83, and Articles 85 to 87 of the Law shall apply.
Article 90 Where a party is merged after the contract has been concluded, the legal person or other organization established after the merger shall exercise the rights and obligations thereunder. Where a party is divided into smaller entities subsequent to conclusion of a contract, except where the obligee and the obligor agree otherwise, the legal persons or other organisations that result from the division shall jointly enjoy the rights and assume the obligations under the contract.
Chapter 6 Termination of Contractual Rights and Obligations
Article 91 The contractual rights and obligations shall be terminated under any of the following circumstances:
1. the debts have been discharged as agreed;
(II) Termination of the Contract;
3. the obligations are mutually offset;
(IV) the obligor has escrowed the subject matter pursuant to the law;
(V) the creditor waives the debt; or
(VI) the claims and debts are assumed by the same person; and
(VII) other termination circumstances provided by law or agreed upon by the parties concerned.
Article 92 When the contractual rights and obligations are terminated, the parties shall, following the principle of good faith, perform such obligations as notification, providing assistance and maintaining confidentiality in accordance with trade practices.
Article 93 The parties may terminate a contract if they reach a consensus through consultation.
The parties may agree upon conditions under which either party may terminate the contract. Upon satisfaction of the conditions, the party who has the right to terminate may terminate the contract.
Article 94 The parties to a contract may terminate the contract under any of the following circumstances:
(1) The objective of the Contract cannot be achieved due to force majeure;
2. prior to the expiration of the period of performance, the other party expressly states, or indicates through its conduct, that it will not perform its main obligation;
3. any party to the contract delays performing its principal obligations and fails to perform the same within a reasonable period of time after being urged to do so;
(IV) the other party delays performance of its obligations, or breaches the contract in some other manner, rendering it impossible to achieve the purpose of the contract;
(V) Other circumstances stipulated by the law arise.
Article 95 Where the law provides for or the parties agree upon a time limit for the exercise of the right to terminate the contract, and no party exercises it when the time limit expires, the said right shall be extinguished.
Where neither the law stipulates nor the parties make an agreement upon the time limit to exercise the right to terminate the contract, and no party exercise it within a reasonable time period after being urged, the said right shall be extinguished.
Article 96 A party demanding termination of a contract in accordance with the provisions of Paragraph 2 of Article 93 and Article 94 of this Law shall notify the other party. The contract shall be terminated upon the receipt of the notice by the other party. If the other party objects to such rescission, it may petition the People's Court or an arbitration institution to determine the validity of the rescission of the contract.
Where the laws and administrative regulations provide that the rescission of a contract shall be subject to approval or registration procedures, such provisions shall govern.
Article 97 After the termination of a contract, performance shall cease if the contract has not been performed; if the contract has been performed, a party may, in accordance with the circumstances of performance or the nature of the contract, demand the other party to restore such party to its original state or adopt other remedial measures, and such party shall have the right to demand compensation for any loss suffered.
Article 98 The termination of the rights and obligations under this Contract shall not affect the validity of the provisions concerning settlement and winding-up.
Article 99 Where the parties are liable to one another for obligations that are due, and if the type and nature of the subject matter of such obligations are the same, any party may offset its own obligation against the obligation of the other party, except unless such offset is not allowed according to the laws and regulations or cannot be made given the nature of the contract.
A party which seeks to offset obligations must notify the other party. The notice shall become effective when it reaches the other party. The offset shall not be subject to any condition or time limit.
Article 100 Where the parties have obligations towards one another, and the type and nature of such obligations are different, the obligations may also be offset upon consensus between the parties after consultation.
Article 101 The obligor may place the subject matter in escrow if the obligations are difficult to be performed under any of the following circumstances:
1. the obligee refuses to accept the performance without justified reasons;
2. the whereabouts of the obligee are unknown;
3. the obligee is deceased and the successor has not been determined, or the obligee has lost its capacity for civil conduct and a guardian has not been determined;
(IV) Other circumstances stipulated by the law arise.
Where the subject matter is not fit for escrow, or the escrow expenses are too high, the obligor may auction or sell the subject matter according to law, and escrow the proceeds therefrom.
Article 102 Unless the whereabouts of the obligee are unknown, the obligor shall notify the obligee, or the successor or guardian of the obligor immediately after the subject matter has been placed in escrow.
Article 103 Once the subject matter has been placed in escrow, the risk of damage to, destruction or loss of the subject matter shall be borne by the obligee. The obligee shall be entitled to any fruits of the subject matter during the escrow period. Escrow expenses shall be borne by the obligee.
Article 104 The obligee may claim the subject matter in escrow at any time, except that if the obligee has any due obligations toward the obligor, prior to the obligee's performance of its obligations or the obligee's provision of security for its performance, the escrow institution shall, at the request of the obligor, refuse the obligee's claim of the escrowed subject matter.
The right of the obligee to claim the subject matter in escrow shall be extinguished if it is not exercised within five years from the date the subject matter is placed in escrow, and the escrowed subject matter shall revert to the State after the deduction of the escrow expenses.
Article 105 Where an obligee releases the obligor of its own obligations, in whole or in part, the rights and obligations under a contract shall terminate in whole or in part.
Article 106 If the rights and obligations under a contract vest in one party, such rights and obligations thereunder shall terminate, unless they involve the interests of a third party.
Chapter 7 Liabilities for Breach
Article 107 Where a party fails to perform its obligations under a contract, or its performance fails to satisfy the terms of the contract, it shall bear the liabilities for breach of contract such as to continue to perform its obligations, to take remedial measures, or to compensate for losses.
Article 108 Where one party express explicitly or indicates by its conduct that it will not perform its obligations under a contract, the other party may demand it to bear the liability for the breach of contract before the expiry of the performance period.
Article 109 If a party fails to pay the price or remuneration, the other party may request it to make the payment.
Article 110 Where a party fails to perform non-monetary obligations or its performance of non-monetary obligations fails to satisfy the terms of the contract, the other party may request it to perform it except under any of the following circumstances:
1. it is unable to be performed in law or in fact;
2. the subject matter of the obligation is unfit for compulsory performance or the performance expenses are excessively high;
(III) the obligee does not require performance within a reasonable time.
Article 111 Where the quality fails to satisfy the agreement, the breach of contract damages shall be borne in the manner as agreed upon by the parties. Where there is no agreement in the contract on the liability for breach of contract or such agreement is unclear, nor can it be determined in accordance with the provisions of Article 61 of the Law, the aggrieved party may, in light of the nature of the subject matter and the seriousness of the loss, reasonably choose to request the other party to bear liabilities for breach of contract in such form as repair, replacement, reworking, return of the goods, and reduction in price or remuneration.
Article 112 Where a party fails to perform its obligations under a contract or its performance fails to satisfy the terms of the contract, and after the party has performed its obligations or taken remedial measures, the other party still suffers other losses, the party shall compensate for such losses.
Article 113 Where one party to a contract fails to perform the contract obligations or its performance fails to satisfy the terms of the contract and cause losses to the other party, the amount of compensation for losses shall be equal to the losses caused by the breach of contract, including the interests receivable after the performance of the contract, provided not exceeding the probable losses caused by the breach of contract which has been foreseen or ought to be foreseen when the party in breach concludes the contract.
A business operator who practices fraud in providing goods or services to consumers shall be liable for compensation for damages in accordance with the Law of the People's Republic of China on the Protection of Consumer Rights and Interests.
Article 114 The parties may agree that if one party breaches the contract, it shall pay a certain sum of liquidated damages to the other party in light of the circumstances of the breach, and may also agree on a method for the calculation of the amount of compensation for the damages incurred as a result of the breach.
If the agreed amount of liquidated damages is lower than the losses incurred, the party concerned may petition a people's court or an arbitration institution to increase the amount; if the agreed amount of liquidated damages is excessively higher than the losses incurred, the party concerned may petition a people's court or an arbitration institution to make an appropriate reduction.
Where the parties agree upon breach of contract damages in respect to the delay in performance, the breaching party shall perform the obligations after paying the breach of contract damages.
Article 115 The parties may agree that a party pay a deposit to the other party as a guaranty for the obligation in accordance with the Security Law of the People's Republic of China. After the obligor performs the obligation, the deposit shall be offset against the price or returned. Where the party which pays the deposit fails to perform its obligations under the contract, it has no right to demand the return of the deposit; where the party which receives the deposit fails to perform its obligations under the contract, it shall return twice the amount of the deposit to the other party.
Article 116 Where both liquidated damages and a deposit have been stipulated by the parties to a contract, when one party breaches the contract, the other party may choose to apply the clause on liquidated damages or the deposit.
Article 117 Would failure of performance of this contract for force majeure part or whole of duty can released therefrom in accordance to the effect thereon, but except of requirement another. The responsibility couldn’ t be released for force majeure after failure of duty performance.
For purposes of this Law, force majeure means unforeseeable, unavoidable and insurmountable objective conditions.
Article 118 Where a party is unable to perform a contract due to force majeure, it shall timely notify the other party so as to mitigate the losses possibly caused to the other party, and shall provide evidence within a reasonable time limit.
Article 119. After one of the parties has breached the contract, the other party shall take appropriate measures to prevent any increase in the losses sustained; where the other party fails to take appropriate measures, and this leads to an increase in the losses sustained, the other party may not demand compensation for the increased losses.
Any reasonable expense incurred by the other party in preventing additional losses shall be borne by the party in breach.
Article 120 If both parties breach a contract, each shall be commensurately liable for the breach of contract that is its responsibility.
Article 121 Where a party's breach is attributable to a third party, it shall be liable to the other party for breach of contract. Any dispute between the party and the third party shall be resolved in accordance with the law or the agreement.
Article 122 Where the breach of contract by one party infringes upon the other party's personal or property rights, the aggrieved party is entitled to choose to claim the assumption by the violating and infringing party of liabilities for breach of contract according to this Law, or to claim the assumption by the violating and infringing party of liabilities for infringement according to other laws.
Chapter 8 Miscellaneous
Article 123 Where other laws provide otherwise with respect to contracts, such provisions shall prevail.
Article 124 Where a contract is not expressly provided for in the Specific Provisions hereof or other laws, the General Provisions hereof shall apply, and the closest corresponding provisions in the Specific Provisions hereof or in other laws may apply mutatis mutandis.
Article 125 If any disputes arise between the parties over the understanding of any clause of the contract, the true meaning thereof shall be determined according to the words and sentences used in the contract, the relevant clauses in the contract, the purpose of the contract, the transaction practices and the principle of good faith.
Where a contract is concluded in two or more languages and it is agreed that all versions are equally authentic, it shall be presumed that the words and sentences used in each version have the same meaning. In case of any discrepancy in the words or sentences used in different versions, they shall be interpreted in light of the purpose of the contract.
Article 126 The parties to a contract involving foreign interests may choose the law applicable to the settlement of their contractual disputes, except as otherwise provided by law. Where the parties to a contract with a foreign element fail to nominate the law of the country that has the closest connection with the contract.
The law of the People's Republic of China shall apply to contracts that are to be performed within the territory of the People's Republic of China, namely contracts for Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures and Chinese-foreign cooperative exploration and development of natural resources.
Article 127 Within the scope of their respective duties, the administrative department of industry and commerce and other relevant departments shall, in accordance with the relevant laws and administrative regulations, be responsible for monitoring and dealing with any illegal acts which, by taking advantage of contracts, harm the interests of the State or the interests of the public and society; where such an act constitutes a crime, criminal liability shall be investigated in accordance with the law.
Article 128 The parties may resolve contractual disputes through settlement or mediation.
If the parties are unwilling to participate in conciliation or mediation, or if the conciliation or mediation is unsuccessful, the parties may, in accordance with an arbitration agreement, apply to an arbitration body for arbitration. The parties to a contract involving foreign interests may, in accordance with their arbitration agreement, apply for arbitration to a Chinese arbitration institution or other arbitration institutions. In the absence of an arbitration agreement or the invalidity of the arbitration agreement, the parties may bring an action in a people's court. The parties shall perform any judgment, arbitration award or mediation agreement that is legally effective; in case of any refusal to perform the same, the other party may petition the people's court for enforcement.
Article 129 For a dispute arising from a contract for the international sale of goods or a technology import or export contract, the time limit for bringing a suit or applying for arbitration is four years, calculating from the date on which the party knows or ought to know the infringement on its rights. The time limit for bringing a suit or applying for arbitration regarding other contractual disputes shall be governed by the relevant laws.
Chapter 9 Sales Contracts
Article 130 A sales contract is a contract whereby the seller transfers the ownership of a subject matter to the buyer, and the buyer pays the price for it.
Article 131 In addition to the terms set forth in Article 12 of this Law, a sales contract may also contain such clauses as package manner, inspection standards and method, method of settlement and clearance, language adopted in the contract and its validity.
Article 132 The subject matter to be sold shall be owned by the seller or of that the seller shall have the right to dispose. Where the transfer of a subject matter is prohibited or restricted by the laws and administrative regulations, such provisions shall apply.
Article 133 The ownership of a subject matter shall be transferred upon the delivery of the subject matter, except as otherwise provided by law or agreed by the parties.
Article 134 The parties to a sales contract may agree that the ownership shall belong to the seller if the buyer fails to pay the price or perform other obligations.
Article 135 The seller shall perform the obligations of delivering to the buyer the subject matter or handing over the documents for the buyer to take possession of the subject matter and of transferring the ownership thereto.
Article 136 In addition to the document for taking possession, the seller shall deliver to the buyer the relevant documents and materials in accordance with the agreement or transaction practices.
Article 137 In a sale of any subject matter which contains intellectual property such as computer software, etc., the intellectual property in the subject matter does not belong to the buyer, except as otherwise provided by law or agreed upon by the parties.
Article 138 The seller shall deliver the subject matter within the agreed time limit. Where a time period for delivery is agreed upon, the seller may deliver at any time within the said time period.
Article 139. Where the parties have not agreed, or have not come to a clear agreement, on a deadline for the delivery of the subject matter, the provisions of Article 61 and Article 62 (4) of this Law shall apply.
Article 140 Where a subject matter has been possessed by the buyer prior to the conclusion of the contract, the delivery time shall be the time when the contract takes effect.
Article 141. The seller shall deliver the subject matter at the agreed location.
Where there is no agreement in the contract between the parties on the place to deliver the subject matter or such agreement is unclear, nor can it be determined in accordance with the provisions of Article 61 of the Law, the following provisions shall apply:
1. in case the subject matter needs carriage, the seller shall deliver the subject matter to the first carrier for transportation to the buyer; and
(II) if the subject matter does not require carriage, and the seller and buyer know the place of the subject matter when concluding the contract, the seller shall deliver the subject matter at such place; if the place is unknown, the subject matter shall be delivered at the business place of the seller when concluding the contract.
Article 142 The risk of damage to or loss of a subject matter shall be borne by the seller prior to the delivery of the subject matter and by the buyer after delivery, except as otherwise stipulated by law or agreed upon by the parties.
Article 143 Where a subject matter cannot be delivered within the agreed time limit due to any reason attributable to the buyer, the buyer shall bear the risk of damage to or loss of the subject matter as of the date of breach of the agreement.
Article 144 Where the seller sells a subject matter delivered to a carrier for carriage and is in transit, unless otherwise agreed by the parties, the risk of damage to or missing of the subject matter shall be borne by the buyer as of the time of establishment of the contract.
Article 145 Where there is no agreement between the parties as to the place of delivery or such agreement is not clearly, and the subject matter needs carriage according to the provisions of Item 1, Paragraph 2 of Article 141 of this Law, the risk of damage to or loss of the subject matter shall be borne by the buyer after the seller has delivered the subject matter to the first carrier.
Article 146 Where the seller has placed the subject matter at the place of delivery in accordance with the agreement or in accordance with the provisions of Item 2 of Paragraph 2 of Article 141 of this Law, while the buyer fails to take delivery in breach of the agreement, the risk of damage to or missing of the subject matter shall be borne by the buyer as of the date of breach of the agreement.
Article 147 The failure of the seller to deliver the documents and materials relating to the subject matter as agreed upon shall not affect the passing of the risk of damage to or missing of the subject matter.
Article 148 If the quality of the subject matter does not conform to the quality requirements, making it impossible to achieve the purpose of the contract, the buyer may refuse to accept the subject matter or may terminate the contract. Where the buyer refuses to accept the subject matter or rescinds the contract, the seller shall bear the risks of damage to or loss of the subject matter.
Article 149 Where the risk of damage to or loss of the subject matter is borne by the buyer, the buyer's right to demand the seller to bear liability for breach of contract because the seller's performance of its obligations is not in conformity with the agreement shall not be affected.
Article 150 The seller shall have the obligation to warrant that no third party shall claim against the buyer any rights with respect to the delivered subject matter, except as otherwise provided by law.
Article 151 Where the buyer knows or ought to know, at the time of conclusion of the contract, that a third party has rights on the subject matter to be sold, the seller shall not assume the obligation prescribed in Article 150 of this Law.
第一百五十二条 买 受人有确切证据证明第三人可能就标的物主张权利的，可以中止支付相应的价款，但出卖人提供适当担保的除外。
Article 152 Where the buyer has conclusive evidence to prove that a third party may claim rights on the subject matter, it may suspend to pay the corresponding price, except where the seller provides a proper guarantee.
Article 153 The seller shall deliver the subject matter in compliance with the agreed quality requirements. Where the seller provides a description of the quality of the subject matter, the subject matter delivered shall comply with the quality requirements set forth therein.
Article 154 Where the quality requirements for the subject matter is not agreed between parties or such agreement is not clear, nor can it be determined according to the provisions of Article 61 of this Law, the provisions of Item 1 of Article 62 of this Law shall be applied.
Article 155 If the subject matter delivered by the seller fails to comply with the quality requirements, the buyer may demand the seller to bear liability for breach of contract in accordance with Article 111 of this Law.
Article 156 The seller shall deliver the subject matter packed in the agreed manner. Where there is no agreement on packaging manner in the contract or the agreement is unclear, nor can it be determined in accordance with the provisions of Article 61 of the Law, the subject matter shall be packed in a general manner, and if there is no general manner, a packaging manner sufficient to protect the subject matter shall be adopted.
Article 157 Upon receipt of the subject matter, the buyer shall inspect it within the agreed inspection period. Where there is no agreement on an inspection period, inspection shall be promptly carried out.
Article 158 Where the parties have agreed upon an inspection period, the buyer shall notify the seller of any non-compliance in quantity or quality of the subject matter within such inspection period. Where the buyer is negligent in giving notice, the quantity or quality of the subject matter shall be deemed to comply with the agreement.
Where no inspection period is agreed, the buyer shall notify the seller within a reasonable period, commencing on the date when the buyer discovered or should have discovered the quantity or quality non-compliance. Where the buyer fails to notify the seller within a reasonable period or fails to notify the seller within two years from the date of receipt of the subject matter, the quantity or quality of the subject matter shall be deemed to comply with the agreement, however where there is a quality guarantee period for the subject matter, the quality guarantee period shall apply, and the two-year rule shall not apply.
Where the seller knows or ought to know that the subject matter to be provided does not conform to the terms of the contract, the buyer is not subject to the time limits for notification prescribed in the preceding two paragraphs.
Article 159 The buyer shall pay the price in the agreed amount. Where the price is not agreed or the agreement is not clear, the provisions of Article 61 and Item 2 of Article 62 shall be applied.
Article 160 The buyer shall pay the price at the agreed place. Where there has been no agreement, or no clear agreement, on the place for payment, and the place for payment cannot be determined by reference to the provisions of Article 61 of this Law, the purchaser shall make payment at the seller's place of business, but if there is a condition of payment that the subject matter be delivered or that a document for the collection of the subject matter be delivered, payment shall be made at the place where the subject matter is delivered or a document for the collection of the subject matter is delivered.
Article 161 The buyer shall pay the price at the agreed time. Where the time for payment is not agreed or the agreement is not clear, nor can it be determined in accordance with Article 61 of this Law, the buyer shall make payment at the same time it receives the subject matter or the document for taking delivery thereof.
Article 162 Where the seller delivers the subject matter in a quantity greater than that stipulated, the buyer may accept or reject the excess quantity. Where the buyer accepts the excess quantity, it shall pay the price based on the contract price; where the buyer refuses to accept the excess quantity, it shall promptly notify the seller.
Article 163 The fruits of the subject matter belong to the seller if accrued before delivery, and to the buyer if accrued after delivery.
Article 164 Where the contract is terminated due to non-compliance of any main component of the subject matter, the effect of termination extends to the ancillary components. Where the contract is terminated due to non-compliance of any ancillary component of the subject matter, the effect of termination does not extend to the main component.
Article 165 Where the subject matter comprises of a number of components, one of which does not comply with the contract, the buyer may rescind the part of the contract in respect of such component, provided that if severance of such component with the other components will significantly diminish the value of the subject matter, a party may rescind the contract in respect of such number of components.
Article 166 Where the seller is to deliver the subject matter in installments, if the seller fails to deliver one installment of the subject matter or the delivery fails to satisfy the terms of the contract so that the said installment cannot realize the contract purpose, the buyer may terminate the portion of the contract in respect thereof.
Where the seller fails to deliver one batch of the subject matter or the delivery of such batch fails to satisfy the terms of the contract, causing the impossibility to realize the purpose of the contract in respect of the subsequent delivery of other batches of the subject matter, the buyer may rescind the part of the contract in respect of such batch and the subsequent batches of the subject matter. If the buyer dissolves with respect to one batch of the subject matter and such batch is interdependent with the other batches of the subject matter, it may dissolve with respect to the batches of the subject matter delivered and not delivered.
Article 167 Where the buyer making payment by installments fails to pay the price due and the amount unpaid accounts for one fifth of the total price, the seller may require payment of the total price from the buyer or terminate the contract.
Where the seller rescinds the contract, the seller may require the buyer to pay a user fee for the subject matter.
Article 168 In a sale by sample, the parties shall place the sample under seal, and may specify the quality of the sample. The subject matter delivered by the seller shall comply with the sample and the specifications in terms of quality.
Article 169 In a sale by sample, if the buyer is not aware of a latent defect in the sample, the subject matter delivered by the seller shall nevertheless comply with the normal quality standard for a like item, even though the subject matter delivered complies with the sample.
Article 170 In a sale by trial, the parties may agree the trial period. If there is no agreement in the contract on such period or such agreement is unclear, nor can it be determined in accordance with the provisions of Article 61 of the Law, it shall be determined by the seller.
Article 171 In a sale by trial, the buyer may either purchase or reject the subject matter during the trial period. At the expiry of the trial period, the buyer is deemed to have purchased the subject matter if it fails to express its intention.
Article 172 In a sale by tender, matters such as the rights and obligations of the parties and the tendering procedure, etc. are governed by the relevant laws and administrative regulations.
Article 173 The rights and obligations of the parties to an auction and the procedures therefor shall be governed by the provisions of the relevant laws and administrative regulations.
Article 174 If there are provisions in the law for other non-gratuitous contracts, such provisions shall apply; in the absence of such provisions, reference shall be made to the relevant provisions for sales contracts.
Article 175 Where the parties agree on a barter transaction involving transfer of title to the subject matter, such transaction shall be governed by reference to the relevant provisions on sales contracts.
Chapter 10 Contracts for Supply of Power, Water, Gas, Or Heat
Article 176 A power supply contract is a contract whereby the power supplier supplies power to the power customer, and the power consumer pay an electricity fee.
Article 177 The contents of a power supply contract include terms such as the method, quality, and time of power supply, and the capacity, location and nature of power use, and the metering method, electricity rate, the method of settlement of electricity fees, and the responsibility for maintenance of the power supply and use facilities, etc..
Article 178 The place of performance of a power supply contract shall be the place agreed upon by the parties, and if there is no agreement or the agreement is not clear, the place of performance shall be the boundary where ownership of the power supply facilities is divided.
Article 179 The supplier of electricity shall safely supply electricity in accordance with the electricity supply quality standards of the State and the terms of the contract. Where the power supplier fails to supply power in a safe manner in accordance with the standards for power supply stipulated by the State and with the terms of the contract, thereby causing losses to the power customer, it shall be liable for damages.
Article 180 Where the power supplier needs to suspend the power supply due to reasons such as planned or provisional maintenance of the power supply facilities, legally restriction on power, or illegal use of power by the power customer, etc., it shall notify the power customer in advance in accordance with the relevant provisions of the State. Where the supplier suspends the supply without notifying the consumer in advance, thereby causing losses to the consumer, the supplier shall be liable for compensation for damages.
Article 181 Where the power supply is suspended due to natural disaster or other reasons, the power supplier shall make prompt repairs in accordance with the relevant provisions of the State. Where the power supplier fails to make rush repairs in time, thereby causing losses to the power customer, it shall be liable for damages.
Article 182 The power customer shall timely pay the electricity fees in accordance with the relevant provisions of the State and with the terms of the contract. Where the power customer fails to pay the electricity fees within the time limit, it shall pay breach of contract damages in accordance with the contract. Where the supplier has called on the consumer to make a payment, but within a reasonable period of time the consumer still fails to do so, the supplier may suspend the supply of electricity in accordance with procedures stipulated by the State.
Article 183 The power customer shall use power in a safe manner in accordance with the relevant provisions of the State and with the terms of the contract. Where the power customer fails to use power in a safe manner in accordance with the relevant provisions of the State and with the terms of the contract, thereby causing losses to the power supplier, it shall be liable for damages.
Article 184 A contract for the supply and consumption of water, gas or heat shall be governed by reference to the relevant provisions on power supply contracts.
Chapter 11 Gift Contracts
Article 185 A gift contract is a contract whereby the donor conveys his property to the donee gratuitously and the donee expresses his acceptance of the gift.
Article 186 Prior to the transfer of rights to the gift property, the donor may revoke the gift.
The provisions of the preceding paragraph shall not apply to any gift contract the nature of which serves the public interests or fulfills a moral obligation, such as disaster relief, poverty relief, etc., or any gift contract which has been notarized.
Article 187 Where conveyance of the gifted property is subject to such procedures as registration according to law, the relevant procedures shall be carried out.
Article 188 In the case of a gift contract the nature of which serves the public interests or fulfills a moral obligation, such as disaster relief, poverty relief, etc., or a gift contract which has been notarized, if the donor fails to deliver the gift property, the donee may require delivery.
Article 189 Where the gifted property is damaged or lost due to any intentional misconduct or gross negligence of the donor, he shall be liable for damages.
Article 190 The donation may be subject to obligations.
Where obligations are attached to the donation, the donee shall perform the obligations in accordance with the contract.
Article 191 The donor is not liable for any defect in the gifted property. In the case of a donation subject to obligations, if the donated property has defects, the donator shall bear the same liability as a seller to the extent of the obligations.
Where the donor deliberately fails to inform the donee of the defects or warrants that there are no defects, thereby causing losses to the donee, he shall be liable for damages.
Article 192 Where the donee falls under any of the following circumstances, the donor may revoke the gift:
1. seriously harming the donator or close relatives thereof;
(II) refusing to perform a duty of maintenance imposed on the donor;
(III) failing to perform the obligations under the gift contract.
The donor shall exercise its revocation right within one year after he knows, or ought to know, the cause for revocation.
Article 193 Where the donor is deceased or incapacitated due to the donee's illegal act, his heir or legal agent may revoke the gift.
The heir or legal agent of the donor shall exercise the right of revocation within six months after he knows, or ought to know, the cause for revocation.
Article 194 In the event of revocation of the gift, the person with the revocation right may claim restitution of the gifted property from the donee.
Article 195 If the donor's economic situation is deteriorated significantly, thereby seriously impacting on his business operation or family life, he may no longer perform the gift obligations.
Chapter 12 Loan Contract
Article 196 A contract for loan of money is a contract whereby the borrower borrows a sum of money from the lender, and repays the borrowed money with interest thereon when it becomes due.
第一百九十七条 借款合同采用书面形式，但自然人之间借款另有约定的除外。 借款合同的内容包括借款种类、币种、用途、数额、利率、期限和还款方式等条款。
Article 197 Loan contracts shall be in writing, unless the loan is between natural persons who have agreed otherwise. The contents of a loan contract shall contain such clauses as the loan's type, currency, purpose, amount, interest rate, term and method of repayment, etc.
Article 198 In entering into a contract for loan of money, the lender may require the borrower to provide a guaranty. The guaranty shall conform to the provisions of the Security Law of the People's Republic of China.
Article 199 In entering into a contract for loan of money, the borrower shall provide true information concerning its business activities and financial condition in connection with the loan as required by the lender.
Article 200 No interest shall be deducted from the principal in advance. If interest is deducted from the principal in advance, the loan shall be repaid and interest shall be calculated on the basis of the actual amount borrowed.
Article 201 Where the lender fails to provide the loan on the agreed date and in the agreed amount, thereby causing losses to the borrower, it shall pay damages.
Where the borrower fails to collect the principal on the agreed date and/or in the agreed amount, the borrower shall pay interest according to the agreed date and/or agreed amount.
Article 202 The lender may inspect and supervise the use of the loan in accordance with the terms of the contract. The borrower shall provide the lender regularly with the relevant financial and accounting statements and other materials in accordance with the contract.
Article 203 Where the borrower fails to use the proceeds for the prescribed purpose, the lender may withhold funding, call the loan, or terminate the contract.
Article 204 The interest rate on the loan provided by a financial institution engaged in lending operation shall be determined between the minimum and maximum rates fixed by the People's Bank of China.
Article 205 The borrower shall pay the interest at the agreed time. Where there is no agreement in the contract on the time limit for payment of interest or such agreement is unclear, nor can it be determined in accordance with the provisions of Article 61 of the Law, the interest shall be paid at the time when the loan is repaid for loans with a term of less than one year; for loans with a term of more than one year, the interest shall be paid upon expiration of each annual period, and if the remaining period is less than one year, the interest shall be paid at the time when the loan is repaid.
Article 206 The borrower shall repay the principal at the agreed time. Where there is no agreement in the contract on the loan period or such agreement is unclear, nor can it be determined in accordance with the provisions of Article 61 of the Law, the borrower may repay the loan at any time, and the lender may demand repayment from the borrower within a reasonable time limit.
Article 207. Where the borrower fails to repay the loan principal within the agreed time period, the borrower shall pay interest in arrears in accordance with the contract or the relevant State regulations.
Article 208 Where the borrower prepays the loan, unless otherwise agreed by the parties, the interest shall be calculated based on the actual period of loan.
Article 209 The borrower may apply to the lender for extension of the loan term before its maturity. If the lender so agrees, the term may be extended.
Article 210 A contract for loan of money between natural persons becomes effective at the time the lender makes the loan amount available.
Article 211 Under a loan contract between natural persons, if payment of interest is not agreed or the agreement is not clear, the loan is deemed interest free.
Under a contract for loan of money between natural persons, the payment of interest shall not violate the relevant provisions of the State on restriction of loan interest rate.
Chapter 13 Lease Contract
Article 212 A lease contract refers to a contract whereby the lessor delivers to the lessee the lease item for it to use or accrue benefit from, and the lessee pays the rent.
Article 213 The contents of a lease contract shall contain such clauses as the name, quantity and purpose of the lease item, lease term, rent as well as time and method for its payment, and maintenance of the lease item.
Article 214 The lease term shall not exceed 20 years. If the lease term exceeds 20 years, the portion of the lease term beyond the initial 20-year period is invalid.
At the expiration of the term of the lease, the parties may renew the lease contract, provided that the renewed term of the lease agreed upon may not exceed 20 years as of the date of renewal.
Article 215 Where the lease term is six months or longer, the lease shall be in writing. If the parties fail to adopt a written form, the lease is deemed a non-term lease.
Article 216 The lessor shall deliver the lease item to the lessee in accordance with the contract and shall, during the lease term, keep the lease item fit for the agreed purpose.
Article 217 The lessee shall use the lease item in the agreed manner. Where there is no agreement in the contract on the method of use of the lease item or such agreement is unclear, nor can it be determined in accordance with the provisions of Article 61 of the Law, the lease item shall be used in a manner consistent with the nature of the lease item.
Article 218 Where the lessee uses the lease item in the agreed manner or in a manner consistent with its nature, thereby causing wear and tear to the lease item, it is not liable for damages.
Article 219 Where the lessee fails to use the lease item in the agreed manner or in a manner consistent with its nature, thereby causing damage to it, the lessor may terminate the contract and claim damages.
Article 220 The lessor shall perform the obligations of maintenance and repair of the leased property, except as otherwise agreed by the parties.
Article 221 Where the lease item needs maintenance or repair, the lessee may require the lessor to perform maintenance or repair within a reasonable time limit. If the lessor fails to fulfill its obligations of maintenance or repair, the lessee may maintain or repair the lease item on its own at the lessor's expense. Where the maintenance and repair affects the use, the rent shall be reduced or the lease term shall be extended correspondingly.
Article 222 The lessee shall keep the lease item with due care and shall be liable for damages if the lease item is damaged or lost due to improper care.
第二百二十三条 承租人经出租人同意，可以对租赁物进行改善或者增设他物。 承租人未经出租人同意，对租赁物进行改善或者增设他物的，出租人可以要求承租人恢复原状或者赔偿损失。
Article 223 Subject to consent of the lessor, the lessee may make improvement on or addition to the lease item. Where the lessee makes improvement on or addition to the lease item without consent of the lessor, the lessor may require the lessee to restore the lease item to its original condition or claim compensation for the losses.
Article 224 With the consent of the lessor, the lessee may sublease the lease item to a third party. Where the lessee subleases the lease item, the lease contract between the lessee and the lessor remains effective, and if the third party causes damage to the lease item, the lessee shall compensate for the losses.
Where the lessee subleases the leased goods without the consent of the lessor, the lessor may rescind the contract.
Article 225 During the lease term, any benefit accrued from the possession or use of the lease item belongs to the lessee, unless otherwise agreed by the parties.
Article 226 The lessee shall pay the rent at the agreed time. Where there is no agreement in the contract on the time limit for payment or such agreement is unclear, nor can it be determined in accordance with the provisions of Article 61 of the Law, the rent shall be paid at the expiration of the lease term if the lease term is less than one year; if the lease term is one year or longer, the rent shall be paid at the expiration of each annual period, and if the remaining period is less than one year, the rent shall be paid at the expiration of the lease term.
Article 227 Where the lessee fails to pay or delays in paying the rent without any reason, the lessor may require the lessee to pay the rent within a reasonable time limit. If the lessee fails to pay the rent at the expiration of the time limit, the lessor may rescind the contract.
Article 228 If due to any claim by a third party, the lessee is unable to use or accrue benefit from the lease item, the lessee may require reduction in rent or refuse to pay rent.
Where a third party claims an interest in the leased goods, the lessee shall promptly notify the lessor.
Article 229 Any change of ownership to the lease item does not affect the validity of the leasing contract.
Article 230 Where the lessor is to sell a dwelling unit under a lease, it shall give the lessee a notice within a reasonable time limit before the sale, and the lessee has the right of first refusal under the same conditions.
Article 231 Where, due to any reason not attributable to the lessee, part or all of the lease item is damaged, or lost, the lessee may require reduction in rent or refuse to pay rent; where the purpose of the contract cannot be achieved due to damage to or loss of part or all of the lease item, the lessee may terminate the contract.
Article 232 Where the term of a lease is not agreed or the agreement is not clear, nor can it be determined in accordance with Article 61 of this Law, such lease is deemed a non-term lease. Either party may rescind the contract at any time, provided that the lessor shall give the lessee a reasonable advance notice before rescinding the contract.
Article 233 Where the lease item endangers the safety or health of the lessee, the lessee may terminate the contract at any time even if the lessee knows the lease item does not meet the quality requirements when concluding the contract.
Article 234 Where the lessee is deceased during the term of a house lease, the persons who live together with the deceased may lease the house in accordance with the original lease contract.
Article 235 The lessee shall return the lease item at the end of the lease term. The returned lease item shall be in conformity with the status after use in accordance with the agreement or in light of the nature of the lease item.
Article 236. Where the lessee continues to use the leased goods after the expiry of the lease period, and the lessor does not raise any objections, the original lease contract shall continue to be effective, but the lease will become a non-term lease.
Chapter 14 Financial Leasing Contracts
Article 237 A financial leasing contract is a contract whereby the lessor, upon purchase of the lease item from a seller selected by a lessee with respect to the seller and the lease item, provides the lease item to the lessee for its use, and the lessee pays the rent.
Article 238 The contents of a financial leasing contract include terms such as the name, quantity, specifications, technical performance, and method of inspection of the leased property, the lease term, the rental components and the time, method and currency of payment, as well as the ownership of the leased property at the end of the lease term, etc.
A financial leasing contract shall be made in writing.
Article 239 Under the sales contract concluded by the lessor according to the lessee's selection of the seller and the lease item, the seller shall deliver the subject matter to the lessee in accordance with the contract, and the lessee enjoys the rights of the buyer in respect of taking delivery of the subject matter.
Article 240 The lessor, the seller and the lessee may agree that any claim arising from the seller's failure in the performance of its obligations under the sales contract will be made by the lessee. Where the lessee exercises the right to claim compensation, the lessor shall provide assistance.
Article 241 Without the consent of the lessee, the lessor may not amend any lessee -related term in the sales contract concluded by it according to the lessee's selection of the seller and the lease item.
Article 242 The lessor shall be entitled to the ownership of the lease item. In case of bankruptcy of the lessee, the leased property does not belong to its bankruptcy property.
Article 243 Unless otherwise agreed by the parties, the rent under a financial leasing contract shall be determined based on the major portion of or full costs of purchasing the leased property and the lessor's reasonable profit.
Article 244 Where the lease item does not comply with the contract or is not fit for the intended purpose, the lessor is not liable, except where the lessee relies on the skills of the lessor in selecting the lease item or the lessor interferes with the selection thereof.
Article 245. The lessor shall guarantee the lessee's possession and use of the leased goods.
Article 246 If in the possession of the lessee, the lease item causes personal injury or property damage to a third party, the lessor is not liable.
Article 247 The lessee shall keep and use the lease item with due care.
The lessee shall perform the obligations of maintenance and repair of the leased property during the period when the lessee possesses the leased property.
Article 248 The charterer shall pay the hire as agreed upon. Where the lessee still fails to pay rent within a reasonable period of time after being urged, the lessor may either require the lessee to pay all rent, or rescind the contract and take back the leased property.
Article 249 Where the parties agree that the lease item shall belong to the lessee at the expiry of the lease term, the lessee has paid the majority of the rent but is unable to pay the remaining rent, and the lessor terminates the contract for this reason and takes back the lease item, if the value of the lease item taken back exceeds the rent and other expenses which the lessee owes to the lessor, the lessee may request the lessor to return a certain part.
Article 250 The lessor and the lessee may agree on the ownership of the lease item at the expiry of the lease term. Where ownership of the lease item is not agreed or the agreement is not clear, nor can it be determined in accordance with Article 61 of this Law, the ownership of the lease item shall belong to the lessor.
Chapter 15 Contracts for Work
Article 251 A contract for work is a contract whereby the contractor shall, in light of the requirements of the ordering party, complete certain work and deliver the results therefrom, and the ordering party pays the remuneration therefor.
Contracting includes processing, ordering, repair, reproduction, testing, inspection, etc.
Article 252 The contents of a contract for work shall contain such clauses as the subject matter, quantity, quality, remuneration and method of the work, supply of materials, term of performance, and standards and method of inspection.
Article 253 The contractor shall use its own equipment, technology and labour to complete the main part of the work, except as otherwise agreed upon by the parties.
Where the contractor assigns a major work task under the contract to a third party for completion, the contractor shall bear responsibility to the party which has placed the order in relation to the results of the said work completed by the third party; where the party which has placed the order has not consented to the work being completed by a third party, the party which has placed the order may terminate the contract.
Article 254 The contractor may assign some ancillary work contracted to a third party for completion. Where the contractor assigns an auxiliary work task under the contract to a third party for completion, the contractor shall bear responsibility to the party which has placed the order in relation to the results of the said work completed by the third party.
Article 255. Where the contractor supplies materials, the contractor shall select and use the said materials in the agreed manner, and shall accept inspection by the party which has placed the order.
Article 256 Where the ordering party is to supply the materials, it shall supply the materials in accordance with the contract. The hiree shall inspect the materials supplied by the hirer in time and shall, if discovering that they do not conform to the terms of the contract, notify in time the hirer to replace them, supply them or take other remedial measures.
The contractor may not replace the materials supplied by the ordering party without authorization, and may not replace any components which do not need to be repaired.
Article 257 Where the contractor discovers that the drawings or technical requirements provided by the ordering party are unreasonable, it shall timely notify the ordering party. Where the contractor suffers losses due to the hirer's delay in reply or other reasons, the hirer shall compensate for the losses.
Article 258 Where the ordering party changes its requirements for the contracted work while the work is under way, thereby causing losses to the contractor, the ordering party shall be liable for making compensation.
Article 259 Where the performance of the contracted work requires assistance of the ordering party, the ordering party shall have the obligation to provide assistance.
Where the hirer does not perform the assistance obligation, thereby making it impossible to complete the contracted work, the hiree may urge the hirer to perform its obligation within a reasonable time limit and may extend the term of its performance; where the hirer fails to perform such obligation within the time limit, the hiree may terminate the contract.
Article 260 During the period of working, the contractor shall accept the necessary supervision over and inspection of the work by the ordering party. The supervision and inspection by the ordering party may not obstruct the normal work of the contractor.
Article 261 Upon the completion of the contracted work, the contractor shall deliver the work results to the ordering party and shall submit necessary technical materials and the relevant quality certificate. The ordering party shall conduct acceptance inspection of the work results.
Article 262 Where the work results delivered by the contractor fail to meet the quality requirements, the ordering party may request the contractor to bear the liabilities for the breach of contract by way of repairing, remaking, reducing remuneration, or making compensation.
Article 263 The hirer shall pay remuneration at the prescribed time. Where there is no agreement in the contract on the time limit for payment of remuneration or such agreement is unclear, nor can it be determined in accordance with the provisions of Article 61 of the Law, the ordering party shall pay remuneration at the time when the contractor delivers the work results; where the work results are only delivered in part, the ordering party shall pay a corresponding amount.
Article 264 Where the ordering party fails to pay the remuneration or cost for the materials, etc. to the contractor, the contractor is entitled to lien upon the work results, except as otherwise agreed upon by the parties.
Article 265 The contractor shall keep the materials supplied by the ordering party and the completed work results with due care, and shall be liable for damages in case of any damage or losses due to improper care.
Article 266 The contractor shall keep the relevant information confidential as required by the ordering party, and may not retain any replica or technical material without permission of the ordering party.
Article 267 Joint contractors are jointly and severally liable to the ordering party, except as otherwise agreed upon by the parties.
Article 268. The party which has placed the order may dissolve a work contract at any time, but the said party shall provide compensation for any losses sustained by the contractor as a result.
Chapter 16 Contracts for Construction Projects
Article 269 A contract for construction project is a contract whereby the contractor performs project construction, and the employer pays the price.
Contracts for construction projects include contracts for survey, design, and construction.
Article 270 A contract for construction project shall be in written form.
Article 271 Tendering for a construction project shall be conducted in an open, fair and impartial manner in accordance with the provisions of the relevant laws.
Article 272 The developer may enter into a contract for construction project with a prime contractor, or enter into contracts for survey, design, and construction with the surveyor, designer, and constructor respectively. The developer may not divide a construction project which should be completed by one contractor into several parts and contract them out to several contractors.
With the consent of the developer, the general contractor or the survey, design or building contractors may assign part of the work contracted thereby to a third party. The third party and the prime contractor or the contractor for survey, design, or construction shall be jointly and severally liable to the developer in respect of the work product completed by such third party. The contractor may not assign the entire contracted construction project to a third party or divide the entire contracted construction project into parts and assign them respectively to third parties in the name of subcontracting. The contractor is prohibited from subcontracting the project to any entity without the corresponding qualifications.
Subcontractors shall be prohibited from further subcontracting their subcontracted work. The main structure of the construction project must be constructed by the contractor itself.
Article 273 A contract for a major state construction project shall be concluded in accordance with the procedures prescribed by the state and in compliance with the state-approved documents such as the investment plan and feasibility studies report, etc.
Article 274 A contract for survey and design includes terms such as the time limit for submission of the relevant basic information and documents (including budget estimate), quality requirements, costs and other conditions of cooperation, etc.
Article 275 The contents of the construction contract include terms such as project scope, construction period, commencement and completion time for intermediate delivery, project quality, project cost, delivery time of technical documents, responsibility for material and equipment supply, appropriation and settlement, completion acceptance, quality warranty scope and quality warranty period, and mutual cooperation between the parties, etc.
Article 276 Where the construction project is subject to supervision, the developer shall enter into an entrustment contract for project supervision in writing with a project supervisor. The rights, obligations and legal liabilities of the developer and supervisor shall be subject to the provisions of the Law on Commission Contracts and other relevant laws and administrative regulations.
Article 277 The Owner may inspect the progress and quality of the work at any time provided that it does not interfere with the Contractor’s normal work.
Article 278 In the case of concealed work, the contractor shall give the developer notice for inspection prior to concealment. Where the developer fails to timely conduct inspection, the contractor may extend the relevant project milestones, and is entitled to claim damages for work stoppage or work slowdown, etc.
Article 279 The employer should, upon completion of project, make acceptance in accordance with the drawings and specification for project, in addition to the criterions of acceptance and standard of quality inspection issued by the State. Once the construction project has passed the acceptance inspection, the developer shall pay the prescribed price and accept the construction project.
A construction project may be delivered for use only after it has passed the acceptance inspection upon its completion. A construction project may not be delivered for use if it has not been inspected or has failed the acceptance inspection.
Article 280 Where the developer sustains any loss from construction delay due to non-compliance of the survey or design or due to delayed delivery of the survey or design documents, the surveyor or the designer shall continue to improve the survey or design, reduce or forgo the survey fee or design fee, and pay damages.
Article 281 Where the construction project fails to meet the prescribed quality requirements due to any reason attributable to the constructor, the developer is entitled to require the constructor to repair, re-construct or make alteration free of charge within a reasonable time. Where delivery of the project is delayed due to such repair, re-construction or alteration, the constructor shall be liable for breach of contract.
Article 282 Where the construction project caused personal injury and property damage during its reasonable usage period due to any reason attributable to the contractor, the contractor shall be liable for damages.
Article 283 Where the developer fails to provide raw materials, equipment, site, funds, or technical information at the prescribed time and in accordance with the contractual requirements, the contractor may extend the relevant project milestones, and is entitled to claim damages for work stoppage or slowdown, etc.
Article 284 If, due to reasons attributable to the developer, a project is suspended or delayed in construction, the developer shall take the appropriate measures to make up or mitigate the loss, and shall indemnify the contractor for its loss and actual expenses arising from resulting work stoppage, slowdown, reshipment, re-dispatch of mechanical equipment, and excess inventory of materials and components.
Article 285 Where in the course of survey or design, any repeating work, work stoppage or change of design results from the developer's change of plan, the incorrect information provided by it, or its failure to provide the working conditions necessary for the survey or design at the prescribed time, the developer shall increase the fees in light of the actual amount of work done by the surveyor or designer.
Article 286 If the developer fails to pay the price in accordance with the contract, the contractor may demand payment from the developer within a reasonable period. Where the contract issuer has not made the said payments within the said period of time, then except where it is not appropriate to conduct a sale at a depreciated price or an auction, due to the nature of the construction project, the contractor may conclude an agreement with the contract issuer that the project be sold off, or may apply to the people's court for the said project to be auctioned in accordance with the law. The construction project price shall be paid in priority out of proceeds from the liquidation or auction of the project.
Article 287 Matters not addressed in this chapter shall be governed by the relevant provision governing contracts of hired works.
Chapter 17 Transportation Contracts
Section 1 General Provisions
Article 288 A transportation contract is a contract whereby the carrier carries passengers or cargoes from the starting place of carriage to the agreed destination, and the passenger, consignor or consignee pays for the ticket-fare or freight.
Article 289 A carrier engaged in public transportation may not refuse the normal and reasonable carriage request of a passenger or consignor.
Article 290 A carrier shall safely carry the passengers or cargoes to the agreed destination within the agreed time or within a reasonable time.
Article 291 The carrier shall carry the passenger or goods to the agreed destination via the agreed or customary carriage route.
Article 292. Passengers, consignors or consignees shall pay fares or transport fees. Where a carrier does not travel along the agreed or the normal route and it increases fares or transport fees, passengers, consignors or consignees may refuse to pay the increased part of the fares or transport fees.
Section 2 Section Two Passenger Transportation contracts
Article 293 A passenger transportation contract is established upon the carrier's delivery of the passenger ticket to the passenger, except as otherwise agreed upon by the parties or there are other transaction practices.
Article 294 The passenger shall board the means of transportation with a valid passenger ticket. If the passenger boards without a ticket, exceeds the distance paid for, takes a higher class or higher berth than booked, or boards with an invalid ticket, he shall make up the payment for an appropriate ticket, and the carrier may charge an additional payment in accordance with the relevant provisions. Where the passenger fails to pay the ticket-fare, the carrier may refuse to carry.
Article 295 Where the passenger is unable to board the means of transportation at the time stated on the passenger ticket due to any reason attributable to himself, he shall undergo the formalities for ticket refund or change within the agreed time period. Where the passenger fails to do so within the time period, the carrier may refuse to make the refund and shall no longer bear the obligation of carriage.
Article 296 In the course of carriage, the passenger's carry-on luggage shall be within the agreed limit of quantity. Where luggage exceeds the relevant limits, the additional luggage shall be checked in.
Article 297 The passenger may not bring with him or pack in the luggage such dangerous articles as are flammable, explosive, toxic, corrosive, or radioactive as well as those that might endanger the safety of life and property on board the means of transportation or other contraband articles.
Where the passenger violates the provisions of the preceding paragraph, the carrier may unload, destroy or turn over to the relevant authorities the prohibited articles. Where the passenger insists on carrying or smuggling the prohibited articles, the carrier shall refuse to carry.
Article 298 The carrier shall timely inform the passenger of any major causes hindering the normal carriage and the matters which shall be noted for purpose of safety carriage.
Article 299 The carrier shall carry the passenger according to the time and the carriage schedule stated on the passenger ticket. Where the carrier delays in carriage, it shall, upon request by the passenger, either arrange the passenger to take other flights or refund the ticket-fare.
Article 300 Where the carrier unilaterally changes the means of transportation, thereby lowering the standards of service, it shall, upon request by the passenger, refund the ticket-fare or lower the price of the ticket; where the service standards are enhanced, no additional ticket-fare shall be charged.
Article 301 In the course of carriage, the carrier shall give its best efforts to assist the passenger who is seriously ill, or who is giving birth to a child or whose life is at risk.
第三百零二条 承运人应当对运输过程中旅客的伤亡承担损害赔偿责任，但伤亡是旅客自身健康原因造成的或者承运人证明伤亡是旅客故意、重大过失造成的除外。 前款规定适用于按照规定免票、持优待票或者经承运人许可搭乘的无票旅客。
Article 302 The carrier shall be liable for damages in case of injury or death of the passenger in the course of carriage, except where such injury or death is attributable to the passenger's own health, or the carrier proves that such injury or death is caused by the passenger's intentional misconduct or gross negligence. The provisions of the preceding paragraph shall apply to a passenger who is exempted from buying a ticket or holds a preferential ticket pursuant to the provisions, or who is permitted by the carrier to be on board without a ticket.
Article 303 Where an article that the passenger takes with him on board is damaged or lost during the period of carriage, the carrier shall be liable for the damage if it has committed faults.
Where the check-in luggage of a passenger is damaged or lost, the relevant provisions governing the carriage of cargoes shall apply.
Section 3 Contracts of carriage
Article 304 In undergoing the formalities for cargoes, the consignor shall precisely indicate to carrier the name of the consignee or the consignee by order, the name, nature weight, amount and the place for taking delivery of the cargoes, and other information necessary for cargo carriage.
Where a carrier suffers losses due to untrue declaration or omission of important information by the consignor, the consignor shall be liable for compensation for damages.
Article 305 Where carriage of the cargo is subject to such procedures as examination and approval or inspection, the consignor shall submit to the carrier the documents of fulfillment of the relevant procedure.
Article 306 The consignor shall pack the cargo in the agreed manner. Where the manner of packaging is not agreed or the agreement is not clear, the provisions of Article 156 of this Law shall apply.
Where a consignor violates the provisions of the preceding paragraph, the carrier may refuse to carry.
Article 307 In consigning any dangerous articles which are inflammable, explosive, toxic, corrosive, or radioactive, the consignor shall, in accordance with the provisions of the State on the transport of dangerous articles, properly pack the dangerous articles and affix thereon signs and labels for dangerous articles, and shall submit the written papers relating to the name, nature and precautions to the carrier.
Where a consignor violates the provisions of the preceding paragraph, the carrier may refuse to transport the goods, and may also take corresponding measures to avoid losses, expenses thus caused shall be borne by the consignor.
Article 308 Before the carrier delivers the goods to the consignee, the consignor may request the carrier to suspend the carriage, return the goods, change the place of destination or deliver the goods to another consignee, but it shall compensate the carrier for any losses thus caused.
Article 309 Upon arrival of the cargoes, if the carrier has the knowledge of the consignee, it shall timely notify the consignee and the consignee shall timely take delivery. If the consignee fails to take delivery of the goods within the prescribed time limit, the consignee shall pay the carrier custody fees and other expenses.
Article 310 When taking delivery of the cargoes, the consignee shall inspect the cargoes at the agreed time. Where there is no agreement in the contract on the time limit or such agreement is unclear, nor can it be determined in accordance with the provisions of Article 61 of the Law, the consignee shall inspect the goods within a reasonable time limit. Where the consignee raises no objection as to the quantity of, or damage to, the goods within the agreed time limit or within a reasonable time limit, the consignee shall be deemed to have delivered the goods in conformity with the details recorded in the transport documents.
Article 311 The carrier shall be liable for damages in case of damage to or loss of the goods in the course of carriage, provided that it is not liable for damages if it proves that such damage to or loss of the goods is caused by force majeure, the nature of the goods themselves, reasonable depletion, or the fault of the consignor or consignee.
Article 312 Where the parties agree on the amount of damages in case of damage to or loss of the goods, the damages payable is the agreed amount; if the amount of damages is not agreed or the agreement is not clear, nor can it be determined in accordance with Article 61 of this Law, it shall be calculated on the basis of the prevailing market price at the destination when the goods are or ought to be delivered. Where laws or administrative regulations provide otherwise with respect to calculation methods or limits on the amount of compensation, those provisions shall apply.
Article 313 Where two or more carriers jointly carry the cargoes using the same mode of transportation, the carrier contracting with the consignor shall be responsible for the whole course of carriage. Where the losses occurred at a particular segment, the carrier contracting with the consignor and the carrier for such segment are jointly and severally liable.
Article 314 Where the goods are lost in the course of carriage due to force majeure, if the freight has not been collected, the carrier may not request the payment thereof; if the freight has been collected, the consignor may request the refund of the freight.
Article 315 Where the consignor or the consignee fails to pay the freight, storage fees and other carriage expenses, the carrier is entitled to lien on the relevant carried cargoes, except as otherwise agreed upon by the parties.
Article 316 Where the consignee is not clear or refuses to take delivery of the goods without a justified reason, the carrier may have the goods in escrow according to the provisions of Article 101 of this Law.
Section 4 Multi-modal Transportation contract
Article 317 A multi-modal transportation operator shall be responsible for performing, or arranging for performance of, the multi-modal transportation contract, and shall have the rights and assume the obligations of a carrier for the entire course of carriage.
Article 318 A multi-modal carriage operator may agree with the carriers participating in the multi-modal carriage in different sections of the carriage on their respective responsibilities in different sections of the carriage, provided that the obligations of the multi-modal carriage operator with respect to the entire carriage are not affected by any such agreement.
Article 319 A multi-modal transportation operator shall issue a multi-modal transportation document upon receipt of the goods from a consignor. A multimodal transport document may be either negotiable or non-negotiable, as requested by the shipper.
Article 320 Where the multi-modal carriage operator sustains any loss due to the fault of the consignor in the course of consigning the goods, the consignor shall be liable for damages notwithstanding its subsequent assignment of the multi-modal carriage document.
Article 321 If damage to or loss of goods occurs in a particular segment of a multi-modal carriage, the multi-modal carriage operator's liability for damages and any limitation thereon are governed by the applicable transportation law of the jurisdiction which such segment is under. Where the section of transportation in which the damage to or loss of goods occurred cannot be determined, the liability for compensation for damages shall be borne in accordance with the provisions of this Chapter.
Chapter 18 Technology Contracts
Section 1 General Provisions
Article 322 A technology contract is a contract the parties conclude for establishing their rights and obligations in respect of the development or transfer of technology, or in respect of technical consulting or service.
Article 323 The conclusion of a technology contract shall be conducive to the advancement of science and technology, and expedite the conversion, application and dissemination of scientific and technological achievements.
Article 324 The contents of a technology contract shall be agreed upon by the parties, and shall contain the following clauses in general:
1. the name of the project;
2. contents, scope and requirements of the subject matter;
(III) plan, schedule, period, place, territory and method of performance;
(IV) confidentiality of technical information and materials;
(V) allocation of responsibility for risks;
(VI) ownership of the technological achievements and method for sharing the gains therefrom;
(VII) standards and methods of acceptance;
(VIII) price, remuneration or royalties and method of payment thereof;
(IX) liquidated damages or method for calculation of damages;
(X) dispute resolution; and
(XI) Interpretation of terms and phrases.
The parties may agree to include the following materials relating to the performance of the contract as an integral part thereof: technical background information, feasibility studies and technical evaluation report, project task matrix and project plan, technical standard, technical specifications, original design and technique documents, as well as other technical documentation.
Where a technology contract involves a patent, the title of the invention or creation, the patent applicant and the patentee, the date and number of application, the patent number as well as the term of validity of the patent shall be indicated.
Article 325 The method for payment of the price, remuneration or licensing fee under a technology contract shall be agreed upon by the parties, who may agree upon lump-sum payment based on one-time calculation or installment payment based on one-time calculation, and may also agree upon royalty payment or royalty payment plus advance payment of initial fee.
Where a royalty payment method is agreed upon, the royalty may be calculated as a percentage of the product price, any increase in output or profits following the exploitation of the patent or the use of the know-how, or of the sales of the product. The proportion of payment of commission may adopt fixed proportion, increasing proportion year by year or decreasing proportion. Where a royalty payment is agreed, the parties shall agree in the contract a method for inspection of the relevant accounts.
Article 326 Where the right to use and the right to transfer job-related technology belong to a legal person or an organization of any other nature, the legal person or organization may enter into a technology contract in respect of such job-related technology. The legal person or other organisation shall allocate a certain percentage from the gains derived from the use and transfer of such job-related technological achievement to reward or remunerate individuals who completed the said technological achievement. When the legal person or other organization concludes a technology contract to transfer the job-related technological achievement, the individual who accomplished this achievement shall have the priority to be the transferee under the same conditions.
A job-related technology is a technology developed in the course of carrying out a task assigned by a legal person or an organization of any other nature, or developed by primarily utilizing the material and technical resources thereof.
Article 327 The right to use and transfer a non-job-related technological achievement shall belong to the individuals who accomplished it, who may conclude technology contracts in respect thereof.
Article 328 An individual who has accomplished a technological achievement shall have the right to be named as such in the documents related to the technological achievement and the right to receive certificates of honor and awards for the achievement.
Article 329 A technology contract which illegally monopolizes technology, impedes technological advancement or infringes on the technology of a third party is invalid.
Section 2 technical development agreement
Article 330 A technology development contract is a contract concluded in respect of the research and development of a new technology, product, technique or material and its system.
Technology development contracts include commissioned technology development contracts and cooperative technology development contracts.
Technology development contracts shall be in writing.
A contract on the conversion of a scientific achievement with potential for industrial application is governed by reference to the provisions on technology development contracts.
Article 331 The commissioning party under a commissioned development contract shall, in accordance with the contract, provide development funds and pay remuneration; supply technical materials and original data; complete its tasks of cooperation; and accept the developed technology.
Article 332 The developer under a commissioned development contract shall, in accordance with the contract, prepare and implement the development plan; use development funds in a reasonable manner; timely complete the development and deliver the developed technology, as well as provide the relevant technical materials and necessary technical guidance so as to help the commissioning party master the technology developed.
Article 333 Where the commissioning party breaches the contract, thereby causing stoppage, delay or failure of the development, it shall be liable for the breach of contract.
Article 334 Where the developer breaches the contract, thereby causing stoppage, delay or failure of the development, it shall be liable for the breach of contract.
Article 335 Parties to a cooperative development contract shall, in accordance with the contract, make investment, including investment in the form of technology; participate in the development by performing their respective tasks; and cooperate with each other in the development.
Article 336 If a party to a cooperative development contract violates the contract, thereby causing a standstill, delay or failure in research and development work, such party shall be liable for breach of contract.
Article 337 Where the technology which is the subject matter of a technology development contract is made public by a third party, thereby making the performance of the technology development contract meaningless, the parties may terminate the contract.
Article 338 The liability for risks involved in failure in part or in whole in the research and development resulting from insurmountable technical difficulties occurring in the course of performance of a technology development contract shall be agreed upon by the parties. No provision or no clear provision:
Indeed, if it cannot be determined in accordance with the provisions of Article 61 of this Law, such risk liability shall be shared reasonably by the parties.
If a party discovers the circumstances set out in the preceding paragraph which may result in failure in part or in whole in the research and development, the party shall inform the other party and take appropriate measures to reduce losses in a timely manner. If the said party fails to promptly notify the other parties and take appropriate measures, thereby aggravating the losses, the said party shall be liable for the additional losses.
Article 339 Unless otherwise agreed upon by the parties, the right to apply for patent on the invention or innovation resulting from a commissioned development belongs to the developer.
Where the developer is granted a patent, the commissioning party may exploit such patent free of charge. If the party that undertakes the research and development transfers the right to apply for a patent, the commissioning party shall have the right of first refusal under the same conditions.
Article 340 Unless otherwise agreed upon by the parties, the right to apply for patent on the invention or innovation resulting from a cooperative development belongs to the parties therein jointly. If one party assigns its joint right to apply for a patent, the other party or parties may have the right of first refusal under the same conditions.
If a party in the cooperative development declares that it waives its joint right to apply for a patent, the other party may apply for it alone or the other parties may jointly apply for it. If a patent is granted to the applicant, the party that waived its right to apply for the patent may exploit the patent for free. Where one party in the cooperative development does not agree to apply for a patent, the other party or parties may not apply for it.
Article 341 The right to use and transfer the technical secret resulting from a commissioned or cooperative development, and the method for allocation of benefits accrued therefrom shall be agreed upon by the parties. Where there is no such agreement in the contract or such agreement is unclear, nor can it be determined in accordance with the provisions of Article 61 of the Law, all the parties shall have the right to use and transfer such rights. However, the party which undertakes research and development in a commissioned development may not transfer the results of the research and development to a third party before delivering such results to the commissioning party.
Section 3 contract of transfer of technology
Article 342 Technology transfer contracts include contracts for the transfer of patent rights, the transfer of patent application rights, the transfer of technical secrets, and patent licensing.
Technology transfer contracts shall be in writing.
Article 343 A technology transfer contract may set forth the scope of exploitation of the patent or the use of the technical secret by the transferor and the transferee, provided that it may not restrict technological competition and technological development.
Article 344 A patent licensing contract is only valid for the duration of such patent right. A patentee may not conclude a patent licensing contract with another person once the term of the patent right expires or the patent right is declared invalid.
Article 345 The transferor to a patent licensing contract shall, in accordance with the terms of the contract, license the transferee to exploit the patent, deliver the technical materials related to the exploitation of the patent and provide the necessary technical guidance.
Article 346 The transferee under a patent licensing contract shall exploit the patent in accordance with the contract and may not license the patent to any third party except as provided for in the contract, and shall pay royalties as agreed.
Article 347 The transferor to a know-how transfer contract shall, in accordance with the terms of the contract, supply technological materials, provide technical guidance and warrant the practical applicability and reliability of the technology and maintain confidentiality.
Article 348 The transferee under a contract for transfer of technical secret shall, in accordance with the contract, use the technology, pay the licensing fee and abide by its confidentiality obligations.
Article 349 The transferor under a technology transfer contract shall warrant that it is the lawful owner of the technology provided, and shall warrant that the technology provided is complete, accurate, effective, and capable of achieving the prescribed goals.
Article 350 The transferee under a technology transfer contract shall, in conformity with the scope and the time period as agreed upon in the contract, abide by its confidentiality obligations in respect of the non-public and secret portion of the technology provided by the transferor.
Article 351 Where the transferor fails to transfer the technology in accordance with the contract, it shall refund the licensing fee in part or in whole, and shall be liable for the breach of contract; where the transferor exploits the patent or uses the technical secret beyond the agreed scope, or unilaterally allows the patent to be exploited or the technical secret to be used by a third party in violation of the contract, it shall cease the breach and be liable for the breach of contract; where the transferor breaches any agreed confidentiality obligation, it shall be liable for the breach of contract.
Article 352 Where the transferee fails to pay the agreed licensing fee, it shall pay the overdue licensing fee and pay breach of contract damages in accordance with the contract; where it fails to pay the overdue licensing fee and breach of contract damages, it shall cease exploitation of the patent or use of the technical secret, return the technical materials, and be liable for the breach of contract; where the transferee exploits the patent or uses the technical secret beyond the agreed scope, or allows the patent to be exploited or the technical secret to be used by a third party without consent of the transferor in breach of the contract, it shall cease the breach and be liable for the breach of contract; where the transferee breaches any agreed confidentiality obligation, it shall be liable for the breach of contract.
Article 353 Where the exploitation of a patent or the use of know-how by the transferee as agreed infringes on the lawful rights and interests of any other person, the liability shall be borne by the transferor, except as otherwise agreed by the parties.
Article 354 The parties may, on the basis of mutual benefit, provide in the technology transfer contract for the method of sharing any subsequent improvement resulting from the exploitation of the patent or use of the technical secret. Where there is no such agreement in the contract or such agreement is unclear, nor can it be determined in accordance with the provisions of Article 61 of the Law, the other parties shall have no right to share any subsequent improvement made by either party.
Article 355 Where the relevant laws or administrative regulations provide otherwise in respect of technology import or export contracts or in respect of patent contracts or contracts for patent application, such provisions shall prevail.
Section 4 Technical Consultancy Contract and Technical Service Contract
Article 356 Technical consultancy contracts include contracts for the provision of feasibility studies, technical forecasts, specialized technical investigations and analysis and evaluation reports in respect of specific technical projects.
A technical service contract means a contract whereby one party solves a particular technical problem for the other party by utilizing its technical knowledge, excluding a construction project contract or a work contract.
Article 357 The client under a technical consulting contract shall, in accordance with the contract, describe the problem on which consultancy is sought, provide the technical background information as well as relevant technical materials and data; and accept the work results from, and pay the remuneration to, the consultant.
Article 358 The consultant under a technical consulting contract shall complete the consulting report or answer the question within the agreed period; the consulting report submitted shall comply with the requirements set forth in the contract.
Article 359 Where the client under a technical consulting contract fails to provide the necessary materials and data in accordance with the contract, thereby impairing the progress and quality of the work, or fails to accept or delays in accepting the work results, it may not claim refund of the remuneration paid, and shall pay any unpaid remuneration.
Where the consultant under a technical consulting contract fails to provide the consulting report within the prescribed period or the consulting report submitted does not comply with the contract, it shall be liable for the breach of contract by way of reducing or foregoing the remuneration, etc.
The client under a technical consulting contract shall compensate the client for any losses arising from its making decisions based on the consulting report and opinions of the consultant which meet the requirements as agreed in the contract, unless otherwise agreed by the parties.
Article 360 The client under a technical service contract shall, in accordance with the contract, provide the working conditions and complete its tasks of cooperation; accept the work results and pay the remuneration.
Article 361 The service provider under a technical service contract shall, in accordance with the contract, complete the services, solve the technical problem, warrant the quality of its work, and communicate the knowledge for solving the technical problem.
Article 362 Where the client under a technical service contract fails to perform its contractual obligations, or the performance is not in conformity with the contract, thereby impairing the progress and quality of the work, or fails to accept or delays in accepting the work results, it may not claim refund of the remuneration paid, and shall pay any unpaid remuneration.
Where the service provider under a technical service contract fails to complete services in accordance with the contract, it shall be liable for the breach of contract by way of forgoing the remuneration, etc.
Article 363 In the course of performing a technical consulting contract or a technical service contract, any new technology developed by the consultant or service provider utilizing the technical materials and working conditions provided by the client belongs to the consultant or service provider. Any new technical results accomplished by the Client by utilizing the work results of the Client shall belong to the Client. Where the parties agree otherwise, their agreement shall be applied.
Article 364. Where the laws and administrative regulations provide otherwise with respect to technology intermediary service contracts and technical training contracts, such provisions shall prevail.
Chapter 19 Storage Contracts
Article 365 A storage contract is a contract whereby the depository keeps the deposit delivered by the depositor, and eventually returns it thereto.
Article 366 The depositor shall pay the storage fee to the depository in accordance with the contract.
Where the storage fee is not agreed or the agreement is not clear, nor can it be determined in accordance with Article 61 of this Law, the storage shall be gratuitous.
Article 367 A deposit contract is established at the time when the deposit is delivered, except as otherwise agreed upon by the parties.
Article 368 Upon the depositor's delivery of the deposit to the depository, the depository shall issue a deposit receipt, except as otherwise practised in transaction.
Article 369 The depository shall keep the deposit with due care.
The parties may agree on the place or method of custody. The place or method of custody may not be unilaterally changed except in case of emergency or for the purpose of protecting the depositor's interests.
Article 370 Where the deposit delivered by the depositor has defects or requires special storage measures in light of its nature, the depositor shall inform the depository of the relevant situation. Where the depositor fails to inform, thereby causing damage to the deposit, the depository is not liable for damages; where the depository sustains any loss as a result, the depositor shall be liable for damages, except where the depository is, or ought to be, aware of the loss and fails to take remedial measures.
Article 371. The custodian shall not transfer the custodial goods into the custody of a third party, except where the parties agree otherwise.
Where the depository, in violation of the provisions of the preceding paragraph, transfers the object deposited to a third party for custody, the depository shall be liable for damages if any loss is caused to the object.
Article 372. The custodian shall not use the custodial goods or permit a third party to use the custodial goods, except where the parties to the contract agree otherwise.
Article 373 Where a third party claims a right over the deposit, the depository shall perform its obligation of returning the deposit to the depositor, except where an order of preservation or enforcement is carried out in respect of the deposit in accordance with the law.
Where a third party brings a lawsuit against the depository or applies for attachment of the deposit, the depository shall timely notify the depositor.
Article 374 Where, during the period of custody, the object deposited is damaged or lost due to lack of due care by the depository, the depository shall be liable for damages, unless the deposit is gratuitous, and the depository proves itself free from any gross negligence.
Article 375 Where the depositor is to deposit money, negotiable securities or other valuables, it shall declare the case to the depository, and the depository shall inspect them prior to acceptance or seal them. Where the depositor fails to make such declaration and the said articles are damaged or lost, the depository may compensate for them as if they were ordinary articles.
Article 376 The depositor may retrieve the deposit at any time.
Where the parties have not agreed or have not come to a clear agreement on the custody period, the custodian may at any time demand that the depositor collect the custodial goods; where the parties have agreed on a custody period, and without special reason, the custodian may not demand that the depositor collect the goods in advance.
Article 377 At the expiry of the deposit period, or if the depositor retrieves the deposit before the expiry of the deposit period, the depository shall return the original item together with any fruit thereof to the depositor.
Article 378 Where the depository keeps money deposit, it may return money of the same type and quantity. Where the depository keeps any other fungible item, it may return any item of the same type, quality and quantity in accordance with the contract.
Article 379 Under a storage contract for value, the depositor shall pay to the depository the storage fee at the agreed time. Where the time of payment of the storage fee is not agreed or the agreement is not clear, nor can it be determined in accordance with Article 61 of this Law, the storage fee shall be paid at the same time the deposit is retrieved.
Article 380 Where the depositor fails to pay the storage fee and other expenses, the depository is entitled to lien on the deposit, except as otherwise agreed upon by the parties.
Chapter 20 Warehousing Contracts
Article 381 A warehousing contract is a contract whereby the safekeeping party stores the goods delivered by the depositor, and the depositor pays the warehousing fee.
Article 382 A warehousing contract becomes effective upon its formation.
Article 383 Where the depositor intends to store any dangerous article which is inflammable, explosive, toxic, corrosive, or radioactive, etc., or any material susceptible to deterioration, it shall indicate the nature of the goods and provide the relevant information.
If the depositor violates the provisions of the preceding paragraph, the depository may reject the goods to be stored, or take appropriate measures to avoid losses. The cost consequently incurred shall be borne by the depositor.
Where the safekeeping party is to store any dangerous article that is inflammable, explosive, toxic, corrosive, or radioactive, etc.,
Article 384 The safekeeping party shall, in accordance with the contract, conduct warehouse-in inspection of the goods. Where the depository discovers in the inspection that the goods to be stored are not in conformity with the terms of the contract, it shall inform the depositor in time. After inspection and acceptance by the depository, if it is discovered that the category, quantity or quality of the stored goods is not in conformity with the terms of the contract, the depository shall be liable for damages.
Article 385 Upon the depositor's delivery of the goods, the safekeeping party shall issue a warehouse receipt.
Article 386 The safekeeping party shall sign or affix a seal on the warehouse receipt. A warehouse receipt shall contain the following items:
1. title or name and domicile of the depositor;
(II) category, quantity, quality, package, number of pieces and mark of the stored goods;
(III) standards for wear and tear of the stored goods;
(IV) storage place;
(V) period of storage;
(VI) Storage Charges
(VII) if the goods have been insured, the amount and period of insurance and the name of the insurer; and
(VIII) the person issuing the document, the place where the document is issued and the date of issuance.
Article 387 A warehouse receipt is the voucher for retrieving the goods. Where the depositor or holder of the warehouse receipt has endorsed the warehouse receipt and the safekeeping party has signed or sealed thereon, the right to retrieve the goods may be assigned.
Article 388 Upon request of the depositor or the holder of the warehouse receipt, the safekeeping party shall allow the person to inspect the goods or take samples therefrom.
Article 389 Where the safekeeping party discovers that the warehoused goods are deteriorating or are otherwise damaged, it shall timely notify the depositor or holder of the warehouse receipt.
Article 390 Where the safekeeping party discovers that the warehoused goods are deteriorating or are otherwise damaged, thereby endangering the safety and normal safekeeping of other warehoused goods, it shall demand disposal of the goods by the depositor or the holder of the warehouse receipt as necessary. In an emergency situation, the safekeeping party may dispose of the goods as required, but shall promptly notify the depositor or holder of the warehouse receipt of the situation afterwards.
Article 391 Where the warehousing period is not agreed or the agreement is not clear, the depositor or holder of the warehouse receipt may retrieve the goods at any time, and the safekeeping party may require the depositor or holder of the warehouse receipt to retrieve the goods at any time, provided that the other party shall be given the time required for preparation.
Article 392 At the expiry of the warehousing period, the depositor or holder of the warehouse receipt shall retrieve the goods by presenting the warehouse receipt to the safekeeping party. Where the depositor or holder of the warehouse receipt fails to collect the goods on time, additional warehousing fee shall be charged; where the goods are collected ahead of time, the warehousing fee shall not be reduced.
Article 393 At the expiry of the warehousing period, if the depositor or holder of the warehouse receipt fails to retrieve the goods, the safekeeping party may demand retrieval within a reasonable period, and if the goods are not retrieved at the expiry of such period, the safekeeping party may place the goods in escrow.
Article 394 Where the goods are damaged or lost during the warehousing period due to improper safekeeping by the safekeeping party, it shall be liable for damages.
If the stored goods are deteriorated or damaged due to inconformity of the nature or the packaging of the stored goods to the terms of the contract, or if the goods exceed the valid storage period, the custodian shall not be liable to provide compensation for the losses sustained.
Article 395 Matters not provided for in this Chapter shall be governed by the relevant provision on storage contracts.
Chapter 21 Commission Contracts
Article 396 A commission contract is a contract whereby the principal and the agent agree that the agent will handle the principal's affairs.
Article 397 The principal may specifically appoint the agent to handle one or more of its affairs, or generally appoint the agent to handle all of its affairs.
Article 398 The principal shall prepay the expenses for handling the entrusted affair (s). Any expense necessary for handling the commissioned affair advanced by the agent shall be repaid with interest by the principal.
Article 399 The agent shall handle the entrusted affair (s) according to the instruction of the principal. Where it is necessary to alter the principal's instructions, the principal's consent shall be obtained; where a situation is so urgent that it is difficult to establish contact with the principal, the agent shall handle the entrusted affair (s) properly and subsequently report to the principal the circumstances in a timely manner.
Article 400 The agent shall personally handle the commissioned affair. With the consent of the principal, the agent may delegate the agency to a third party. If the delegation is approved, the principal may directly give instructions to the delegated third party for the delegated affairs, and the agent shall be liable only for the selection of the third party and its own instructions to the third party. Where the agency is delegated without consent, the agent shall be liable for any act of the delegate, except in an emergency where the agent needs to delegate the agency in order to safeguard the interests of the principal.
Article 401 Upon request by the principal, the agent shall report on the progress of the commissioned affair. When a commission contract is terminated, the agent shall report on the results of the commissioned affair.
Article 402 Where the agent, acting within the scope of authority granted by the principal, enter into a contract in its own name with a third party who is aware of the agency relationship between the principal and agent, the contract is directly binding upon the principal and such third party, except where there is conclusive evidence establishing that the contract is only binding upon the agent and such third party.
Article 403 Where the agent enter into a contract in its own name with a third party who does not know about the agency relationship between the agent and the principal, if the agent fails to perform its obligation towards the principal due to any reason attributable to such third party, the agent shall disclose the third party to the principal, and the principal may exercise the agent's rights against such third party, unless the third party would not enter into the contract with the agent if it knew the identity of the principal at the time of conclusion of the contract.
Where the agent fails to perform its obligation toward the third party due to any reason attributable to the principal, the agent shall disclose the principal to the third party, and the third party may therefore choose the agent or the principal as the other party to assert its rights, provided that the third party may not change its choice of the relevant party.
Where the principal exercises the agent's rights against the third party, the third party may raise with the principal its counterclaims against the agent. Where the third party chooses the principal as the other party to the contract, the principal may avail itself of any defense it has against the agent as well as any defense the agent has against the third party.
Article 404 The agent shall hand over to the principal the property obtained in handling the entrusted affair (s).
Article 405 Upon completion of the entrusted affair (s), the principal shall pay remuneration to the agent. Where, due to causes not attributable to the agent, the commission contract is rescinded or the entrusted affair (s) cannot be completed, the principal shall pay the agent corresponding remuneration. Where the parties agree otherwise, their agreement shall be applied.
Article 406 With respect to mandate contracts for value, the principal may demand compensation for any losses sustained due to the fault of the agent. With respect to mandate contracts not for value, the principal may demand compensation for any losses sustained due to the deliberate intention or gross negligence of the agent.
Where the agent acts beyond the scope of authorization, thereby causing loss to the principal, it shall compensate for the loss.
Article 407 In the course of handling the commissioned affair, if the agent sustains any loss due to a reason not attributable to itself, the agent may seek indemnification from the principal.
Article 408 With the consent of the agent, the principal may entrust a third party other than the agent to handle the entrusted affair (s). The agent may demand that the principal provide compensation for any losses sustained as a result.
Article 409 Where two or more agents jointly handle the commissioned affair, they are jointly and severally liable to the principal.
Article 410. A principal or an agent may dissolve a mandate contract at any time. A party shall be liable to provide compensation for any losses sustained by the other party due to the dissolution of the contract, except for causes not attributable to the said party.
Article 411 A commission contract shall be terminated by the death, loss of capacity for civil conduct or bankruptcy of the principal or the agent, unless the parties have agreed otherwise or it is inappropriate to terminate the contract given the nature of the commissioned affair.
Article 412. Where the principal dies, loses its capacity for civil acts or becomes bankrupt, and the resulting termination of the mandate contract will be detrimental to the principal's interests, then prior to the principal's heirs, legal agent or liquidation organisation assuming responsibility for the delegated affairs, the agent shall continue to handle the delegated affairs.
Article 413 If the commission contract is terminated due to the agent's death, loss of capacity for civil conduct or bankruptcy, the agent's heir, statutory agent or liquidation group shall notify the principal in a timely manner. If termination of the mandate contract will be detrimental to the principal's interests, then prior to the principal acting to rectify the situation, the agent's heirs, legal representative or liquidation organisation shall take the necessary measures.
Chapter 22 Contracts of Commission Agency
Article 414 A contract of commission agency is a contract whereby the commission agent conducts trading activities in its own name for the principal, and the principal pays the remuneration.
Article 415 The expenses paid by the broker in the course of handling the entrusted affairs shall be borne by the broker, except as otherwise agreed upon by the parties.
Article 416 Where the commission agent is in possession of the entrusted item, it shall keep the entrusted item with due care.
Article 417 If an entrusted item is defective, perishable or susceptible to deterioration at the time it was delivered to the commission agent, the commission agent may dispose of the item subject to the consent of the principal. Where the commission agent is unable to contact the principal in time, it may dispose of the entrusted item in a reasonable manner.
Article 418 Where the broker sells at a lower price or buys at a higher price than the price set by the principal, consent shall be obtained from the principal. If such sale is effected without consent by the principal, and the commission agent makes up the deficiency on its own, it is binding on the principal.
Where the broker sells at a higher price or buys at a lower price than the price set by the principal, remuneration may be increased in accordance with the terms of the contract. Where such matter is not agreed or the agreement is not clear, nor can it be determined in accordance with Article 61 of this Law, the benefit belongs to the principal.
Where the principal gives special instructions with respect to the price at which the goods are to be purchased or sold, the commission agent may not act contrary to such instructions in completing the purchase or sale.
Article 419 Where the commission agent sells or purchases commodities the price of which is fixed by the market, the commission agent may act as the purchaser or seller itself, unless the principal expresses a contrary intention.
Under the circumstance specified in the preceding paragraph, the commission agent may still request the principal to pay the remuneration.
Article 420. Where the commission agent purchases entrusted goods as agreed, the principal shall promptly collect the said goods. Where after receiving demand from the commission agent, the principal refuses to take delivery without cause, the commission agent may place the entrusted item in escrow in accordance with the provisions of Article 101 of this Law.
Where the entrusted goods cannot be sold or the principal withdraws the sale, and the principal fails to take back or dispose of the goods after being called upon by the commission agent to do so, the commission agent may place the entrusted goods in escrow in accordance with Article 101 of this Law.
Article 421 Where the commission agent enters into a contract with a third party, it directly enjoys the rights and assumes the obligations thereunder.
Where the third party fails to perform its obligations, thereby causing damage to the principal, the commission agent shall be liable for damages, unless the commission agent and the principal have agreed otherwise.
Article 422 Where the commission agent has completed the entrusted matter or has partially completed the entrusted matter, the principal shall pay the appropriate remuneration thereto. Where the principal fails to pay the remuneration within the prescribed period, the commission agent is entitled to lien on the entrusted goods, unless the parties have agreed otherwise.
Article 423 Matters not addressed in this chapter shall be governed by the relevant provision on commission contracts.
Chapter 23 Intermediation contracts
Article 424 An intermediation contract is a contract whereby the broker presents to the client an opportunity for entering into a contract or provides the client with intermediary services in connection with the conclusion thereof, and the client pays the remuneration.
Article 425 The intermediator shall report truthfully to the client on the matters related to the conclusion of a contract.
Where the intermediator intentionally conceals a material fact relating to the conclusion of the contract or provides false information, thereby harming the interests of the client, the intermediator may not require the payment of remuneration and shall be liable for damages.
Article 426. Where the intermediary facilitates the establishment of a contract, the client shall pay remuneration to the intermediary as agreed. Where remuneration to the broker is not agreed or the agreement is not clear, nor can it be determined in accordance with Article 61 of this Law, it shall be reasonably determined on the basis of the amount of labor expended by the broker. Where the provision, by the intermediary, of intermediary services relating to the conclusion of the contract facilitates the establishment of a contract, the parties to the said contract shall be equally liable to pay the intermediary's remuneration. Where the broker facilitates the formation of the proposed contract, the brokerage expenses shall be borne by the broker.
Article 427 Where the intermediator fails to facilitate the establishment of a contract, the intermediator may not require the payment of remuneration, but may require the client to pay the necessary expenses for the intermediate activities.
Article 428 This Law shall go into effect as of October 1, 1999, and the Economic Contract Law of the People's Republic of China, the Foreign-related Economic Contract Law of the People's Republic of China, and the Technology Contract Law of the People's Republic of China shall be repealed simultaneously.
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