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| Contract Law of the People's Republic of China 2006-7-2 17:22:05 |
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(Adopted at the Second Session of the Ninth National People's Congress on March 15, 1999) Contents General Provisions
Specific Provisions
Supplementary Provisions General Provisions Chapter 1 General Provisions Article 1 This Law is formulated with a view to protecting the lawful rights and interests of the parties to contracts, maintaining the social economic order and promoting the progress of the socialist modernization drive. Article 2 A contract in this Law refers to an agreement establishing,
modifying and terminating the civil rights and obligations between subjects of
equal footing, that is, between natural persons, legal persons or other
organizations. Article 3 The parties to contract shall have equal legal status. No party may impose its will on the other party. Article 4 The parties shall have the rights to be voluntary to enter into a contract in accordance with the law. No unit or individual may illegally interfere. Article 5 The parties shall abide by the principle of fairness in defining the rights and obligations of each party. Article 6 The parties must act in accordance with the principle of good faith, no matter in exercising rights or in performing obligations. Article 7 In concluding and performing a contract, the parties shall abide by the laws and administrative regulations, observe social ethics. Neither party may disrupt the socio-economic order or damage the public interests. Article 8 As soon as a contract is established in accordance with the law, it
shall be legally binding on the parties. The parties shall perform their
respective obligations in accordance with the terms of the contract. Neither
party may unilaterally modify or rescind the contract.
Chapter 2 Conclusion of Contracts Article 9 In concluding a contract, the parties shall have appropriate civil
capacity of right and civil capacity of conduct.
Article 10 The parties may conclude a contract in written, oral or other
forms. Article 11 The written forms mean the forms which can show the described contents visibly, such as a written contractual agreement, letters, and data-telex (including telegram, telex, fax, EDI and e-mails). Article 12 The contents of a contract shall be agreed upon by the parties,
and shall contain the following clauses in
general: Article 13 The parties shall conclude a contract in the form of an offer and acceptance. Article 14 An offer is a proposal hoping to enter into a contract with other
parties. The proposal shall comply with the following stipulations:
Article 15 An invitation for offer is a proposal for requesting other parties
to make offers to the principal. Price forms mailed, public notices of auction
and tender, prospectuses and commercial advertisements, etc. Are invitations for
offer. Article 16 An offer becomes effective when it reaches the offeree.
Article 17 An offer may be withdrawn, if the withdrawal notice reaches the offeree before or at the same time when the offer arrives. Article 18 An offer may be revoked, if the revocation reaches the offeree before it has dispatched an acceptance. Article 19 An offer may not be revoked, if Article 20 An offer shall be null and void under any of the following
circumstances: Article 21 An acceptance is a statement made by the offeree indicating assent to an offer. Article 22 Except that it is based on transaction practices or that the offer indicates an acceptance may be made by performing an act, the acceptance shall be made by means of notice. Article 23 An acceptance shall reach the offeror within the time limit fixed
in the offer. Article 24 Where the 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 moment the telegram is handed in for dispatch. If no such date is shown in the letter, it commences from the date shown on the envelope. Where an offer is made by means of instantaneous communication, such as telephone or facsimile, the time limit for acceptance commences from the moment that 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 needn't be notified, it becomes effective when an act
of acceptance is performed in accordance with transaction practices or as
required in the offer. Article 27 An acceptance may be withdrawn, but a notice of withdrawal shall reach the offeror before the notice of acceptance reaches the offeror or at the same time when the acceptance reaches the offeror. Article 28 Where an offeree makes an acceptance beyond the time limit for acceptance, the acceptance shall be a new offer except that the offeror informs the offeree of the effectiveness of the said acceptance promptly. Article 29 If the offeree dispatches the acceptance within the time limit for acceptance which can reach the offeror in due time under normal circumstances, but the acceptance reaches the offeror beyond the time limit because of other reasons, the acceptance shall be effective, except that, the offeror informs the offeree promptly that it does not accept the acceptance because it exceeds the time limit for acceptance. Article 30 The contents of an acceptance shall comply with those of the offer. If the offeree substantially modifies the contents of the offer, it shall constitute a new offer. The modification relating to the contract object, quality, quantity, price or remuneration, time or place or method of performance, liabilities for breach of contract and the settlement of disputes, etc., shall constitute the substantial modification of an offer. Article 31 If the acceptance does not substantially modifies the contents of the offer, it shall be effective, and the contents of the contract shall be subject to those of the acceptance, except as rejected promptly by the offeror or indicted in the offer that an acceptance may not modify the offer at all. Article 32 Where the parties conclude a contract in written form, the contract is established when both parties sign or affix a seal on it. Article 33 Where the parties conclude the contract in the form of a letter or data-telex, etc., one party may request to sign a letter of confirmation before the conclusion of the contract. The contract shall be established at the time when the letter of confirmation is signed. Article 34 The place of effectiveness of an acceptance shall be the place of
the establishment of the contract. Article 35 Where the parties conclude a contract in written form, the place where both parties sign or affix a seal shall be the place where the contract is established. Article 36 A contract, which shall be concluded in written form as provided for by the laws and administrative regulations or as agreed upon by the parties, shall be established, as the parties do not use the written form, but one party has performed the principal obligation and the other party has received it. Article 37 A contract, which is concluded in written form, shall be established, if one party has performed its principal obligation and the other party has received it before signiture or affixing with a seal. Article 38 In case the State issues a mandatory plan or a State purchasing order task based on necessity, the relevant legal persons or other organizations shall conclude contracts between them in accordance with the rights and obligations as stipulated by the relevant laws and administrative regulations. Article 39 Where standard terms are adopted in concluding a contract, the
party which supplies the standard terms shall define the rights and obligations
between the parties abiding by the principle of faimess, request the other party
to note the exclusion or restriction of its liabilities in reasonable ways, and
explain the standard terms according to the requirement of the other party.
Article 40 When standard terms are under the circumstances stipulated in Article 52 and Article 53 of this Law, or the party which supplies the standard terms exempts itself from its liabilities, weights the liabilities of the other party, and excludes the rights of the other party, the terms shall be null and void. Article 41 If a dispute over the understanding of the standard terms occurs, it shall be interpreted according to general understanding. Where there are two or more kinds of interpretation, an interpretation unfavourable to the party supplying the standard terms shall be preferred. Where the standard terms are inconsistent with non-standard terms, the latter shall be adopted. Article 42 The party shall be liable for damages if it is under one of the
following circumstances in concluding a contract and thus causing losses to the
other party: Article 43 A business secret the parties learn in concluding a contract shall not be disclosed or unfairly used, not matter the contract is established or not. The party who causes the other party to suffer from losses due to disclosing or unfairly using the business secret shall be liable for damages. Chapter 3 Effectiveness of Contracts Article 44 The contract established according to law becomes effective when
it is established. Article 45 The parties may agree on some collateral conditions relating to
the effectiveness of a contract. The contract with entry-into-force conditions
shall be effective when such conditions are accomplished. The contract with
dissolving conditions shall be null and void when such conditions are
accomplished. Article 46 The parties may agree on a conditional time period as to the effectiveness of the contract. A contract subject to an effective time period shall come into force when the period expires. A contract with termination time period shall become invalid when the period expires. Article 47 A contract concluded by a person with limited civil capacity of
conduct shall be effective after being ratified afterwards by the person's
statutory agent, but a pure profit-making contract or a contract concluded which
is appropriate to the person's age, intelligence or mental health conditions
need not be ratified by the person's statutory agent.
Article 48 A contract concluded by an actor who has no power of agency, who
oversteps the power of agency, or whose power of agency has expired and yet
concludes it on behalf of the principal, shall have no legally binding force on
the principal without ratification by the principal, and the actor shall be held
liable. Article 49 If an actor has no power of agency, oversteps the power of agency, or the power of agency has expired and yet concludes a contract in the principal's name, and the counterpart has reasons to trust that the actor has the power of agency, the act of agency shall be effective. Article 50 Where a atatutory representative or a responsible person of a legal person or other organization oversteps his/her power and concludes a contract, the representative act shall be effective except that the counterpart knows or ought to know that he/she is overstepping his/her powers. Article 51 Where a person having no right to disposal of property disposes of other persons' properties, and the principal ratifies the act afterwards or the person without power of disposal has obtained the power after concluding a contract, the contract shall be valid. Article 52 A contract shall be null and void under any of the following
circumstances: Article 53 The following immunity clauses in a contract shall be null and
void: Article 54 A party shall have the right to request the people's court or an
arbitration institution to modify or revoke the following contracts:
Article 55 The right to revoke a contract sahll extinguish under any of the
following circumstances: Article 56 A contract that is null and void or revoked shall have no legally binding force ever from the very beginning. If part of a contract is null and void without affecting the validity of the other parts, the other parts shall still be valid. Article 57 If a contract is null and void, revoked or terminated, it shall not affect the validity of the dispute settlement clause which is independently existing 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 can not be returned or the return is unnecessary, it shall be reimbursed at its estimated price. The party at fault shall compensate the other party for losses incurred as a result therefrom. If both parties are at fault, each party shall respectively be liable. Article 59 If the parties have maliciously conducted collusion to damage the interests of the State, a collective or a third party, the property thus acpuired shall be turned over to the State or returned to the collective or the third party. Chapter 4 Performance of Contracts Article 60 The parties shall perform their obligations thoroughly according
to the terms of the contract. Article 61 Where, after the contract becomes effective, there is no agreement in the contract between the parties on the terms regarding quality, price or remuneration and place of performance, etc. Or such agreement is unclear, the parties may agree upon supplementary terms through consultation. In case of a failure in doing so, the terms shall be determined from the context of relevant clauses of the contract or by transaction practices. Article 62 If the relevant terms of a contract are unclear, nor can it be
determined according to the provisions of Article 61 of this Law, the provisions
below shall be applied: Article 63 In cases where the government-fixed price or government-directed price is followed in a contract, if the said price is readjusted within the time limit for delivery as stipulated in the contract, the payment shall be calculated according to the price at the time of delivery. If the delivery of the object is delayed and the price has risen, the original price shall be adopted; while the price has dropped, the new price shall be adopted. In the event of delay in taking delivery of the object or late payment, if the price has risen, the new price shall be adopted; while the price has dropped, the original price shall be adopted. Article 64 Where the parties agree that the obligor performs the obligations to a third party, and the obligor fails to perform the obligations to the third party or the performance does not meet the terms of the contract, the obligor shall be liable to the obligee for the breach of contract. Article 65 Where the parties agree that a third party performs the obligations to the obligee, and the third party fails to perform the obligations or the performance does not meet the terms of the contract, the obligor shall be liable to the obligee for the breach of contract. Article 66 If both parties have obligations toward each other and there is no order of priority in respect of the performance of obligation, the parties shall perform the obligations simultaneously. One party has the right reject the other party's request for performance if the other party's performance. One party has the right to reject the other party's corresponding request for performance if the other party's performance does not meet the perms of the contract. Article 67 Where both parties have obligations towards each other and there has been an order of priority in respect of the performance, and the party which shall render its performance first has not rendered the performance, the party which may render its performance lately has the right to reject the other party's request for performance. Where the party which shall render its performance first violates the terms of a contract while fulfilling the obligations, the party which may render its performance lately has the right to reject the other party's corresponding request for performance. Article 68 One party, which shall render its performance first, may suspend
its performance, if it has conclusive evidence that the other party is under any
of the following circumstances: Article 69 One party to a contract which suspends its performance of the contract in accordance with the provisions of Article 68 of this Law, shall promptly inform the other party of such suspension. It shall resume its performance of the contract when the other party provides a sure guarantee. After the suspension of the performance, if the other party does not reinstate its capacity of performance and does not provide with a sure guarantee, the party suspending performance of the contract may rescind the contract. Article 70 If the obligee does not notify the obligor its separation, merger or a change of its domicile so as to make it difficult for the obligor to perform the obligations, the obligor may suspend the performance of the contract or have the object deposited. Article 72 The obligee may reject the partial performance of the contract by
the obligor, except that the partial performance does not damage the interests
of the obligee. Article 73 If the obligor is indolent in exercising its due creditor's right,
thus damaging the interests of the obligee, the obligee may request the people's
court for subrogation in its own name, except that the creditor's right
exclusively belongs to the obligor. Article 74 If the obligor renounces its due creditor's right or transfers its
property gratis, thus damaging the interests of the obligee, the obligee may
request the people's courts to revoke the obligor's act. If the obligor
transfers its property at an obviously unreasonable low price, thus damaging the
interests of the obligee, and the transferee knows such situation, the obligee
may request the people's court to revoke the obligor's act.
Article 75 The time limit for exercising the right of revocation shall be one year, commencing from the day when the obligee is aware or ought to be aware of the causes of revocation. If the right of revocation has not been exercised within five years from the day when the act of the obligor takes place, the right of revocation shall be extinguished. Article 76 After a contract becomes effective, the parties may not reject to perform the obligations of the contract because of modification of the title or name of the parties, or change of the statutory representative, the responsible person or the executive person of the parties. Chapter 5 Modification and Assignment of Contracts Article 77 A contract may be modified if the parties reach a consensus
through consultation. Article 78 If the contents of the modified contract agreed by the parties are unclear, it shall be presumed that the contract is not modified. Article 79 The obligee may assign, wholly or in part, its rights under the
contract to a third party, except for the following circumstances:
Article 80 An obligee assigning its rights shall notify the obligor. Without
notifying the obligor, the assignment shall not become effective to the obligor.
Article 81 If the obligee assigns is rights, the assignee shall acquire the collateral rights relating to the principal right, except that the collateral rights exclusively belong to the obligee. Article 82 After the obligor receives the notice of assignment of the creditor's right, it may claim its demur in respect of the assignor to the assignee. Article 83 When the obligor receives the notice of assignment of the creditor's rights, and the obligor has due creditor's rights to the assign or, and the creditor's rights of the obligor are due in priority to the assigned creditor's rights or due at the same time, the obligor may claim to offset each other to the assignee. Article 84 If the obligor assigns its obligations, wholly or in part, to a third party, it shall obtain consent from the obligee first. Article 85 If the obligor assigns its obligations to a third party, the new obligor may claim the demur belonging to the original obligor in respect of the obligee. Article 86 If the obligor assigns its obligations to a third party, the new obligor shall assume the collateral obligations relating to the principal obligations, except that the obligations exclusively belong to the original obligor. Article 87 Where the laws or administrative regulations stipulate that the assignment of rights or transfer of obligations shall go through approval or registration procedures, such provisions shall be followed. Article 88 One party to a contract may assign its rights and obligations under the contract together to a third party with the consent of the other party. Article 89 If one party to a contract assigns its rights and obligations under the contract together to a third party, the provisions of Article 79, Article 81 to 83, and Article 85 to 87 of this Law shall be applied. Article 90 If one party to a contract is merged after the contract has been concluded, the legal person or other organization established after the merger shall exercise the contract rights and perform the contract obligations. If one party is separated after the contract has been concluded, the legal persons or other organizations thus established after the separation shall exercise the contract rights or assume the contract obligations jointly and severally. Chapter 6 Termination of the Rights and Obligations of Contracts Article 91 The rights and obligations of contracts shall be terminated under
any of the following circumstances: Article 92 When the rights and obligations of contracts are terminated, the parties to a contract shall, abiding by the principle of good faith, perform such obligations as making a notice, providing assistance and maintaining confidentiality according to transaction practices. Article 93 A contract may be rescinded if the parties to the contract reach a
consensus through consultation. Article 94 The parties to a contract may rescind the contract under any of
the following circumstances: Article 95 Where the laws stipulate or the parties agree the time limit to
exercise the right to rescind the contract, and no party exercises it when the
time limit expires, the said right shall be extinguished.
Article 96 One party to a contract shall make a notice to the other party if
it advances to rescind the contract according to the provisions of Paragraph 2,
Article 93 and Article 94 of the Law. The contract shall be rescinded upon the
arrival of the notice at the other party. The party may, if the other party
disagrees therewith, request the people's court or an arbitration institution to
confirm the effectiveness of rescinding the contract.
Article 97 If a contract has not yet been performed, its performance shall be terminated after the rescission. If it has been performed, a party to the contract may, in light of the performance and the character of the contract, request that the original status be restored or other remedial measures be taken. Article 98 The termination of the rights and obligations of a contract may not affect the force of the settlement and clearance clauses in the contract. Article 99 Where the parties to a contract have debts due mutually and the
category and character of the debts are the same, any party may offset his debt
against the other's one, except that the debts may not be offset according to
the provisions of the laws or to the character of the contract.
Article 100 Where the parties to a contract have debts due mutually and the category and character of the debts are different, the debts may be offset against each other if both parties have reached a consensus through consultation. Article 101 The obligor may deposit the object if the debt obligations are
difficult to be performed under any of the following circumstances:
Article 102 After the object is deposited, the obligor shall, except that the obligee is missing, make a notice promptly to the obligee or the obligee's heir or guardian. Article 103 The risk of damage to and missing of the object after being deposited shall be borne by the obligee. During the period of depositing, the fruits generated by the object shall belong to the obligee. The deposit expenses shall be borne by the obligee. Article 104 The obligee may claim the deposited object at any time. However,
if the obligee is under a debt due to the obligor the deposit authorities shall
refuse him to claim the deposited object at the request of the obligor, before
the obligee has performed his debt obligations or provides a guaranty.
Article 105 If the obligee exempts the obligor from the debt obligations wholly or in part, the whole or part of the rights and obligations of a contract shall be terminated. Article 106 If the creditor's rights and debt obligation are assumed by the same person, the rights and obligations of a contract shall be terminated, except for those involving the interests of a third party. Chapter 7 Liability for Breach of Contracts Article 107 Where one party to a contract fails to perform the contract obligations or its performance fails to satisfy the terms of the continue to perform its obligations, to take remedial measures, or to compensate for losses. Article 108 Where one party to a contract expresses explicitly or indicates through its acts that it will not perform the 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 one party to a contract fails to pay the price or remuneration, the other may request it to make the payment. Article 110 Where one party to a contract fails to perform the non-monetary
debt or its performance of non-monetary debt fails to satisfy the terms of the
contract, the other party may request it to perform it except under any of the
following circumstances: Article 111 If the quality fails to satisfy the terms of the contract, the breach of contract damages shall be borne according to the terms of the contract agreed upon by the parties. If 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 this Law, the damaged party may, in light of the character of the object and the degree of losses, reasonably choose to request the other party to bear the liabilities for the breach of contract such as repairing, substituting the goods, or reducing the price or remuneration. Article 112 Where one party to a contract fails to perform the contract obligations or its performance fails to satisfy the terms of the contract, the party shall, after performing its obligations or taking remedial measures, compensate for the losses, if the other party suffers from other 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
causes 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 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.
Article 114 The parties to a contract may agree that one party shall, when
violating the contract, pay breach of contract damages of certain amount in
light of the breach, or may agree upon the calculating method of compensation
for losses resulting from the breach of contract.
Article 115 The parties to a contract may, according to the Guaranty Law of the People's Republic of China, agree that one party pays a deposit to the other party as the guaranty for the creditor's rights. After the debt obligations are performed by the obligor, the deposit shall be returned or offset against the price. If the party that pays the deposit fails the perform the agreed debt obligations, it shall have no right to reclaim the deposit. If the party that receives the deposit fails to perform the agreed debt obligations, it shall return twice the amount of the deposit. Article 116 Where the parties to a contract agree on both breach of contract damages and a deposit, when one party violates the contract, the other party may choose to apply the breach of contract damages clause or the deposit clause. Article 117 In case that a contract is not able to be performed because of
force majeure, the liabilities shall be exempted in part or wholly in light of
the effects of force majeure, except as otherwise stipulated by law. If the
force majeure occurs after one party has delayed in performance, the liability
may not be exempted. Article 118 One party to a contact that is not able to perform the contract because of force majeure shall make a notice to the other party promptly so as to reduce the probable losses to the other party and provide evidence within a reasonable time limit. Article 119 After one party violates a contract, the other party shall take
proper measures to prevent from the enlargement of losses; if the other party
fails to take proper measures so that the losses are enlarged, it may not claim
any compensation as to the enlarged losses. Article 120 In case that both parties violate a contract, they shall bear the liabilities respectively. Article 121 One party that violates the contract because of a third party shall be liable for the breach of contract to the other party. The disputes between the said party and the third party shall be settled according to law or their agreement. Article 122 In case that the breach of contract by one party infringes upon the other party's personal or property rights, the aggrieved party shall be 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 Provisions Article 123 If there are provisions as otherwise stipulated in respect to contracts in other laws, such provisions shall be followed. Article 124 Any contract which is not addressed explicitly in the Specific Provisions of this Law or in other laws shall apply the provisions of the General Provisions of this Law or in other laws may be applied mutatis mutandis. Article 125 With regard to disputes between the parties to a contract arising
from the understanding of any clause of the contract, the true intention of such
clause shall be determined according to the terms and expressions used in the
contract, the contents of the relevant clauses of the contract, the purpose for
concluding the contract, the transaction practices and the principle of good
faith. Article 126 The parties to a contract involving foreign interests may choose
the law applicable to the settlement of their contract disputes, except as
otherwise stipulated by law. If the parties to a contract involving foreign
interests have not made a choice, the law of the country to which the contract
is most closely connected shall be applied. Article 127 The departments of administration for industry and commerce and other competent departments shall, within the scope of their respective competence and functions, be responsible for supervision over and dealing with illegal acts in taking advantage of contracts to endanger and harm the State interests and public interests. In case that a crime is constituted, criminal responsibility shall be investigated. Article 128 The parties may settle their disputes relevant to the contract
through conciliation or mediation. Article 129 The time limit for action before the people's court or for arbitration before an arbitration institution regarding disputes relating to contracts for international sales of goods and contracts for technology import and export shall be four years, calculating from the date on which the party knows or ought to know the infringement on its rights. The time limits for action before the people's court or for arbitration before an arbitration institution regarding other contracts disputes shall be in accordance with the provisions of the relevant laws.
Chapter 9 Contracts for Sales Article 130 A sales contract is a contract whereby the seller transfers the ownership of an object to the buyer and the buyer pays the price for it. Article 131 Other than those as stipulated 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 authenticity. Article 132 An object to be sold shall be owned by the seller or of that the
seller is entitled to dispose. Article 133 The ownership of an object shall be transferred upon the delivery of the object, except as otherwise stipulated by law or agreed upon 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 obligation to deliver to the buyer the object or the documents to take delivery of the object, and to transfer the ownership of the object. Article 136 The seller shall, according to the terms of the contract or transaction practices, deliver to the buyer relevant documents and materials other than the documents to take delivery of the object. Article 137 When an object such as computer software with intellectual property rights is sold, the intellectual property rights of such object shall not belong to the buyer except as otherwise stipulated by law or agreed upon by the parties. Article 138 The seller shall deliver the object according to the agreed time limit. If a time limit of delivery is agreed upon, the seller may deliver at any time within the said time limit. Article 139 Where there is no agreement in the contract between the parties as to the time limit to deliver the object or such agreement is unclear, the provisions of Article 61 and Sub-Paragraph (4), Article 62 of this Law shall be applied. Article 140 If an object has been possessed by the buyer before the contract is concluded, the delivery time shall be the time when the contract goes into effect. Article 141 The seller shall deliver the object according to the agreed
place. Where there is no agreement in the contract between the parties as to the
place to deliver the object or such agreement is unclear, nor can it be
determined according to the provisions of Article 61 of this Law, the following
provisions shall be applied: Article 142 The risk of damage to or missing of an object shall be borne by the seller before the delivery of the object and by the buyer after the delivery, except as otherwise stipulated by law or agreed upon by the parties. Article 143 Where the object cannot be delivered according to the agreed time limit due to causes of the buyer, the buyer shall bear the risk of damage to or missing of the object as of the agreed date of delivery. Article 144 Where the seller sells an object delivered to a carrier for carriage and en route of carriage, the risk of damage to or missing of the object shall be borne by the buyer as of the time of establishment of the contract, except as otherwise agreed upon by the parties. Article 145 Where there is no agreement in the contract between the parties as to the place of delivery or such agreement is unclear, and the object needs carriage according to the provisions of Sub-paragraph (1), Paragraph 2, Article 141 of this Law, the risk of damage to or missing of the object shall be borne by the buyer after the seller has delivered the object to the first carrier. Article 146 Where the seller has put an object at the place of delivery according to the provisions of Sub-paragraph (2), Paragraph 2, Article 141 of this Law, while the buyer fails to take delivery of the object by violating the terms of the contract, the risk of damage to or missing of the object shall be borne by the buyer as of the date of breach. Article 147 The buyer's failure in delivering the documents and materials relating to the object according to the terms of the contract may not affect the risk transfer of the damage to or missing not affect the risk transfer of the damage to or missing of the object. Article 148 Where it is not able to realize the purpose of a contract because the quality of the object has not satisfied the quality requirements, the buyer may refuse to accept the object or may rescind the contract. Where the buyer refuses to accept the object or rescinds the contract, the seller shall bear the risk of damage to or missing of the object. Article 149 In case that the buyer bears the risk of damage to or missing of the object, the buyer's right may not be affected to claim the assumption by the seller of the liabilities for breach of contract because of the seller's performance failing to conform with the terms of the contract. Article 150 The seller shall, in respect of the object delivered, assume the obligation to guarantee that no third party may claim any right to the buyer, except as otherwise stipulated by law. Article 151 Where the buyer knows or ought to know, when concluding the contract, that a third party has rights on the object to be sold, the seller may assume no obligation as stipulated in Article 150 of this Law. Article 152 Where the buyer has conclusive evidence to demonstrate that a third party may probably claim rights on the object, the buyer may suspend to pay the corresponding price, unless the seller provides a proper guaranty. Article 153 The seller shall deliver the object according to the agreed quality requirements. In case that the seller provides with the quality specifications concerning the object, the delivered object shall satisfy the quality requirements in such specifications. Article 154 Where there is no agreement between the parties in the contract on the object requirements or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, the provisions of Sub-paragraph (1), Article 62 of this Law shall be applied. Article 155 Where the object delivered by the seller fails to conform with the quality requirements, the buyer may claim the assumption by the seller of the liabilities for breach of contract according to the provisions of Article 111of this Law. Article 156 The seller shall deliver the object in the agreed package manner. Where there is no agreement on package manner in the contract or the agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, the object shall be packed in a general manner, and if no general manner, a package manner enough to protect the object shall be adopted. Article 157 The buyer shall inspect the object within the agreed inspection period after receiving the object. In case there is no such period agreed upon in the contract, the inspection shall be made in time. Article 158 Where the parties have agreed upon the inspection period in the
contract, the buyer shall, within the period for inspection, make a notice to
the seller that the object quantity or quality fails to conform with the terms
of the contract. If the buyer is indolent in making such a notice, it shall be
deemed that the object quantity or quality has conformed with the terms of the
contract. Article 159 The buyer shall pay the price according to the agreed amount in the contract. If there is no agreement in the contract on the price or such agreement is unclear, the provisions of Article 61 and Sub paragraph (2), Article 62 of this Law shall be applied. Article 160 The buyer shall pay the price at the agreed place. If there is no agreement in the contract on the place of payment or the agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, the buyer shall pay at the seller's business place. However, if it is agreed that the delivery of the object or the documents to take delivery of the object is set as a prerequisite to the payment of the price, the payment shall be made at the place where the object or the documents to take delivery of the object are delivered. Article 161 The buyer shall pay the price at the agreed time. If there is no agreement in the contract on the time of payment or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of the Law, the buyer shall pay at the same time when receiving the object or the documents to take delivery of the object. Article 162 Where the seller delivers excessive objects, the buyer may accept or refuse to accept the excess part. In case the buyer accepts the excess part, the buyer shall pay for it at the price in the original contract; if he refuses to accept the excess part, the buyer shall make a notice to the seller promptly. Article 163 Any fruits generated by the object before delivery shall be owned by the seller, while those generated after delivery shall be owned by the buyer. Article 164 If a contract is rescinded resulting from that the principal part of the object fails to satisfy the terms of the contract, the effectiveness of rescinding the contract shall extend to the collateral part. Where the collateral part of the object fails to satisfy the terms of the contract so that it has been rescinded, the effectiveness of its rescinding may not extend to the principal part. Article 165 Where the object contains several items and one of them fails to satisfy the terms of the contract, the buyer may rescind the contract with respect to such item. However, if its separation from other items will damage the object value obviously, the parties may rescind the contract with respect to such several items. Article 166 Where the seller delivers the object in batches, if the seller
fails to deliver one batch of the object or the delivery fails to satisfy the
terms of the contract so that the said batch can not realize the contract
purpose, the buyer may rescind the contract with respect to such batch of
object. 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 whole price, the
seller may request the buyer to pay the whole price or may rescind the contract.
Article 168 The parties to a sales transaction based upon the sample shall seal up the sample, and may make specifications on the sample quality. The object delivered by the seller shall have the same quality as the sample and the specifications. Article 169 Where the buyer to a sales transaction based upon the sample does not know that the sample has a hidden defect, even if the object delivered is the same as the sample, the object delivered by the seller shall still meet the normal standards of the kind. Article 170 The parties to a sales transaction on trial use may agree on the period of trail use of the object. If there is no agreement in the contract on such period or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, it shall be determined by the seller. Article 171 The buyer to a sales transaction on trial use may, during the period of trial use, buy the object or refuse to buy it. Upon the expiry of the period of trial use, if the buyer fails to express whether or not to buy the object, the purchase shall be deemed. Article 172 The rights and obligations of the parties to a sales transaction in the form of inviting and making tenders and the procedures therefor, shall be in accordance with the provisions of relevant laws and administrative regulations. Article 173 The rights and obligations of the parties to an auction and the procedures therefor, shall be in accordance with the provisions of relevant laws and administrative regulations. Article 174 Where there is any provision on other non-gratuitous contracts in the laws, such provisions shall be followed, if no such provisions, the relevant provisions on sales contracts shall be applied mutatis mutandis. Article 175 Where the parties make an agreement on a barter trade, and the ownership of the object is to be transferred, the relevant provisions on sales contracts shall be applied mutatis mutandis. Chapter 10 Contracts for Supply and Use of Electricity, Water, Gas or Heating Article 176 A contract for supply and use of electricity refers to a contract whereby the supplier of electricity supplies electricity to the user of electricity, and the user pays the electric fee. Article 177 The contents of a contract for supply and use of electricity shall contain such clauses as the manner, quality, and time of supplying electricity, quantity of use, address and character of use, method of measurement, method of settlement and clearance of electricity price and fees, and the responsibility for maintaining the facilities for supply and use of electricity. Article 178 The place where a contract for supply and sue of electricity is to be performed shall be agreed upon by the parties. Where there is no such agreement between the parties in the contract or such agreement is unclear, the place where the property rights of the electricity supply facilities are demarcated shall be the place of performance. Article 179 The supplier of electricity shall safely supply electricity in accordance with the standards for the supply of electricity stipulated by the State and the terms of the contract. Where the supplier of electricity in accordance with the standards for the supply of electricity as stipulated by the State and terms of the contract, and causes losses to the user of electricity, it shall be liable for damages. Article 180 When the supplier of electricity needs to suspend the supply of electricity due to such reasons as planned or ad hoc inspection and repair of the facilities for supply of electricity, restriction on electricity according to law or use of electricity in advance in accordance with the relevant provisions of the State. Where it suspends the supply without notifying the user in advance and causes losses to the user, the supplier of electricity shall be liable for damages. Article 181 Where the supplier of electricity suspends the supply of electricity due to such reasons as natural disasters, it shall make prompt repairs in accordance with the relevant provisions of the State. Where it fails to make prompt repairs and cause losses to the user, it shall be liable for damages. Article 182 The user of electricity shall pay the electricity fees as scheduled in accordance with the relevant provisions of the State and the terms of the contract. If the user of electricity does not pay the electricity fees within the time limit, it shall pay breach of contract damages in accordance with the terms of the contract. If the user still does not pay the electricity fees and the breach of contract damages, the supplier may suspend the supply of electricity in accordance with the procedures stipulated by the State. Article 183 The user of electricity shall use the electricity in accordance with the relevant provisions of the State and the terms of the contract. Where the user of electricity fails to use the electricity safely according to the relevant provisions of the State and the terms of the contract and causes losses to the supplier of electricity, it shall be liable for damages. Article 184 Contracts for supply and use of water, gas or heating shall apply mutatis mutandis the provisions on contracts for supply and use of electricity. Chapter 11 Contracts for Donation Article 185 A donation contract refers to a contract whereby the donator presents gratis its property to the donee, and the donee expresses the acception of the donation. Article 186 The donator may rescind the donation before transferring of the
rights of the donated property. Article 187 If the donated property needs to go through such formalities as registration according to law, the relevant formalities shall be completed. Article 188 In case of a donation contract being of such nature as for public welfare or moral obligation in providing disaster or poverty relief, or that the donation contract is notarized, if the donator does not deliver the donated property, the donee may request for the delivery. Article 189 Where, due to the deliberate intention or gross fault of donator, destruction or losses are caused to the donated property, the donator shall be liable for damages. Article 190 The donation may be subject to collateral obligations.
Article 191 Where the donated property has defects, the donator shall not
bear any liability. In case of a donation subject to collateral obligations, if
the donated property has defects, the donator shall bear the same liability as a
seller within the limit of the collateral obligations.
Article 192 Where the donee is under any of the following circumstances, the
donator may rescind the donation: Article 193 In case of the donee's illegal acts resulting in the death of the
donator or the loss of the donator's civil of capacity conduct, the heir or
statutory agent of the donator may rescind the donation.
Article 194 Where a person having the right to rescission rescinds the donation, the person may request the donee to return the donated property. Article 195 Where economic conditions of the donator is strikingly deteriorating, which seriously affects his/her production and business operations or the family life, the donator may no longer perform the donation obligation. Chapter 12 Contracts for Loans Article 196 A loan contract refers to a contract whereby the borrower raises a loan from the lender, and repays the loan with interest thereof when it becomes due. Article 197 Loan contracts shall be in written form, except as otherwise
agreed upon by natural persons in respect of loans between them.
Article 198 In concluding a loan contract, the lender may require the borrower to provide a guaranty. The guaranty shall abide by the provisions of the Guaranty Law of the People's Republic of China. Article 199 In concluding a loan contract, the borrower shall provide with the truthful information about the business activities and financial conditions relating to the loan according to the requirements of the lender. Article 200 The interest of the loan shall not be deducted from the principal in advance. Where the interest is deducted in advance from the principal, the loan shall be repaid and the amount of the interest calculated according to the actual amount of the loan. Article 201 Where the lender fails to extend the loan in accordance with the
agreed date and amount and causes losses to the borrower, the lender shall
compensate for the losses. 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 regularly the relevant financial statements and other materials to the lender in accordance with the terms of the contract. Article 203 Where the borrower fails to use the loan in accordance with the agreed usage of the loan,, the lender may cease in extending the loan, recall the loan ahead of time or rescind the contract. Article 204 Loan interest rates of the financial institutions conducting loan business shall be determined according to the upper limit and lower limit of loan interest rates stipulated by the People's Bank of China. Article 205 The borrower shall pay the interest in accordance with the agreed time limit. Where there is no agreement in the contract as to the time limit for payment of interest or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, the interest shall be paid at the time when the loan is returned for loans under a term of less than one year; as for loans under a term of more than one year, the interest shall be paid at the time when every one full year expires, and if the remaining term is less than one year, the interest thereof shall be paid at the time when the loan is returned. Article 206 The borrower shall return the loan in accordance with the agreed time limit in the contract. Where there is no agreement in the contract as to the loan term or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, the borrower may return the loan within a reasonable time limit. Article 207 Where the borrower fails to return the loan in accordance with the agreed time limit, the borrower shall pay overdue interest according to the terms of the contract or the relevant provisions of the State. Article 208 Where the borrower returns the loan ahead of time, except as otherwise agreed upon between the parties, the interest thereof shall be calculated according to the actual term of the loan. Article 209 The borrower may apply to the lender for an extension of the loan return term before the loan term expires. If the lender consents, the term may be extended. Article 210 A loan contract between natural persons shall come into force as of the time when the lender extends the loan. Article 211 If there is no agreement in a loan contract between natural
persons as to the payment of interest or such agreement in unclear, it shall be
deemed as non-payment of interest or such agreement is unclear, it shall be
deemed as non-payment of interest. Chapter13 Contracts for Lease Article 212 A lease contract refers to a contract whereby the lessor shall deliver the leased property to the lessee for the latter's use or obtaining proceeds through the use, and the lessee pays the rent. Article 213 The contents of a lease contract shall contain such clauses as the name, quantity, purpose for use, term of the lease, rent as well as time limit and method for its payment, maintenance of the leased property. Article 214 The term of a lease may not exceed 20 years; in case of a term
exceeding 20 years, the exceeding part shall be invalid.
Article 215 Where the lease term is above 6 months, the lease contract shall be in written form. If the parties do not conclude it in written form, it shall be deemed an unfixed lease. Article 216 The lessor shall deliver the leased property to the lessee and keep it being fit for the use according to the terms of the contract during the term of the lease. Article 217 The lessee shall use the leased property in accordance with the methods agreed upon in the contract. Where there is no agreement in the contract on the methods for using the leased property in accordance with the methods agreed upon in the contract. Where there is no agreement in the contract on the methods for using the leased property or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, the leased property shall be used in a manner in light of its nature. Article 218 Where the lessee uses the leased property in accordance with the methods agreed upon in the contract or the nature of leased property and causes losses to the leased property, the lessee shall not bear the liability for damages. Article 219 Where the lessee uses the leased property not in accordance with the methods agreed upon in the contract or the nature of the leased property and causes losses to the leased property, the lessor may rescind the contract and claim compensation for losses. Article 220 The lessor shall perform the obligation of maintenance of the leased property, except as otherwise agreed upon by the parties. Article 221 The lessee may request the lessor to maintain and repair the leased property within a reasonable time limit when the leased property needs maintenance and repair. Where the lessor fails to perform the obligation of maintaining and repairing the leased property, the lessee may maintain it by itself, and the expenses for the maintenance shall be borne by the lessor. Where the maintenance affects the use of the leased property, the rent shall be reduced or the lease term shall be extended correspondingly. Article 222 The lessee shall keep the leased property in proper shortage. In case that improper storage causes destruction of, damage to or lost of the leased property, the lessee shall bear the liability for damages. Article 223 With the consent of the lessor, the lessee may improve or add
other items to the leased property. Article 224 With the consent of the lessor, the lessee may sublet the leased
property to a third party. In case of subletting by the lessee, the lease
contract between the lessee and lessor shall continue to be effective, and the
lessee shall compensate for the losses if the third party causes losses to the
leased property. Article 225 The proceeds gained due to possession or use of the leased property shall belong to the lessee, except as otherwise agreed upon by the parties. Article 226 The lessee shall pay the rent according to the time limit agreed upon in the contract. Where there is no agreement in the contract as to the time limit for payment or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, the rent shall be paid at the expiry of the lease term if the lease term is less than one year, or shall be paid at the expiry of every one full year if the lease term is more than one year, the rest of rent shall be paid at the expiry of the lease term if the remaining lease term is less than one year. Article 227 Where the lessee fails to pay or delays the payment of the rent without justified reasons, the lessor may require it to pay the rent within a reasonable time limit. If the lessee fails to pay the rent according to the time limit, the lessor may rescind the contract. Article 228 Where a third party claims rights and makes it impossible for the
lessee to use or obtain proceeds from the leased property, the lessee may
request a reduction of rent or not to pay the rent.
Article 229 In case of a change with regard to the ownership of the leased property, the effectiveness of the contract shall not be affected. Article 230 If the lessor sells out a leased house, it shall, within a reasonable time limit before the sale, notify the lessee and the lessee shall have the right to priority to buy the leased house on equal conditions. Article 231 If, due to causes which are not attributable to the lessee, part or all of the leased property is damaged, destroyed or lost, the lessee may request for a reduction of the rent or not to pay the rent. If the damage to or destruction or loss of part or all of the leased property makes it impossible to realize the purpose of the contract, the lessee may rescind the contract. Article 232 Where there is no agreement between the parties in the contract as to the term of the lease or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, such lease shall be considered to be an unfixed lease. The parties may rescind the contract at any time, but the lessor shall, at the rescission of the contract, notify the lessee before a reasonable time limit. Article 233 Where the leased property endangers the safety or health of the lessee, even if the lessee knows the leased property does not meet the quality requirements when concluding the contract, the lessee may rescind the contract at any time. 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 leased property at the expiry of the lease term. The property returned shall be in conformity with the conditions after use according to the terms of the contract or the nature of the leased property. Article 236 Where the lessee continues to use the leased property after the expiry of the lease term, and the lessor does not raise objection, the original lease contract shall continue to be effective, but the lease term is not fixed. Chapter 14 Contracts for Financial Lease Article 237 A financial lease contract refers to a contract whereby the lessor buys the leased property from the seller based on the lessee's choice of the seller and the leased property, and supplies it to the lessee for the lather's use, and the lessee pays the rent. Article 238 The contents of a financial lease contract shall contain such
clauses as the title, quantity, specifications, technical performance and
inspection methods of the leased property, the term of the lease, the rent
composition and the time limit and kinds of currencies for payment of the rent,
and the attribution of the leased property at the expiry of the lease term.
Article 239 With regard to the sales contract concluded by the lessor based on the lessees' choice of the seller and the leased property, the seller shall deliver the object to the lessee according to the terms of the contract, and the lessee shall enjoy the rights of a buyer relating to the received object. Article 240 The lessor, seller and lessee may agree that, where the seller fails to perform the sales contract, the lessee shall exercise the right to claims. Where the lessee exercises the right, the lessor shall provide assistance. Article 241 The sales contract concluded by the lessor based on the lessee's choice of the seller and the leased property, shall bot be modified in respect of the contents of the contract relating to the lessee without the consent of the lessee. Article 242 The lessor shall be entitled to the ownership of the leased property. In case of bankruptcy of the lessee, the leased property does not belong to the bankrupt property. Article 243 The rent under a financial lease contract shall be determined according to the major part or whole of the cost for purchasing the leased property and reasonable profits of the lessor, except as otherwise agreed upon by the parties. Article 244 Where the leased property does not conform to the terms of the contract or the purpose of its use, the lessor shall not bear any liability, except that the lessee decides on the choice of the leased property depending on the skills of the lessor or the lessor interferes with the choice of the leased property. Article 245 The lessor shall insure the lessee's possession and use of the leased property. Article 246 Where the leased property caused personal injury or property damage to a third party during the period wherein the lessee possesses the leased property, the lessor does not bear liability. Article 247 The lessee shall keep the leased property in a proper storage and
use it properly. Article 248 The lessee shall pay the rent according to the terms of the contract. If the lessee still does not pay the rent within a reasonable time limit after being urged, the lessor may request it to pay all the rent, or rescind the contract and take back the leased property. Article 249 Where the parties agree in the contract that the leased property 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 rescinds the contract for this reason and takes back rent, and the lessor rescinds the contract for this reason and takes back the leased property, the lessee may request the lessor to return a certain part if the value of the leased property taken back exceeds the rent and other expenses which the lessee owes to the lessor. Article 250 The lessor and lessee may agree upon the attribution of the leased property at the expiry of the lease term. Where there is no agreement in the contract as to the attribution of the leased property or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, the ownership of the leased property shall belong to the lessor. Chapter 15 Contracts for Work Article 251 A work contract refers to a contract whereby the contractor
shall, in light of the requirements of the ordering party, complete the work and
deliver the results therefrom, and the ordering party pays the remuneration
therefor. Article 252 The contents of a work contract shall contain such clauses as the object, quantity, quality, remuneration and method of the work, supply of materials, term of performance, standards and method of inspection. Article 253 The contractor shall use its own equipment, technology and labour
force to complete the principal part of the work, except as otherwise agreed
upon by the parties. Article 254 The contractor may assign some auxiliary work contracted to a third party for completion. The contractor shall be responsible to the ordering party for the work results completed by a third party if the contractor assigns the auxiliary work to the third party. Article 255 Where the contractor provides with materials, the contractor shall select and use the materials according to the terms of the contract and accept inspection by the ordering party. Article 256 Where the ordering party supplies materials, the ordering party
shall supply the materials according to the terms of the contract. The
contractor shall promptly inspect the materials supplied by the ordering party
and, if it discovers that they do not conform to the agreement in the contract,
it shall promptly notify the ordering party to replace them or supply what is
lacking or take other remedial measures. Article 257 Where the contractor discovers that the drawings supplied by the ordering party or the technical requirements are unreasonable, it shall promptly notify the ordering party. If, due to the indolent reply of the ordering party and other reasons, losses are caused to the contractor, the ordering party shall be liable for making compensation. Article 258 Where the ordering party changes the requirements of the contracted work midway and causes losses to the contractor, the ordering party shall be liable for making compensation. Article 259 If the contracted work needs the assistance of the ordering party, the ordering party shall have the obligation to provide assistance. Where the ordering party does not perform the assistance obligation and causes the contracted work unable to be completed, the contractor may urge the ordering party to perform its obligation within a reasonable time limit and may prolong the term of performance; the contractor may rescind the contract if the ordering party does not perform such obligation within the time limit. Article 260 The contractor shall, during the period of working, accept the necessary supervision over and inspection of the work by the ordering party. The ordering party may not obstruct the contractor's normal work with the supervision and inspection. Article 261 Where the contractor completes the work, it shall deliver the results of the work to the ordering party, and submit necessary technical materials and the relevant quality certificates. The ordering party shall examine and accept the results of the work. Article 262 Where the results of the work delivered by the contractor do not conform to the quality requirements, the ordering party may request the contractor to bear such liabilities for the breach of contract as repairing, reprocessing, reducing remuneration and making compensation. Article 263 The ordering party shall pay remuneration according to the time limit agreed by the parties in the contract. Where there is no agreement in the contract as to the time limit for payment of remuneration or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, the ordering party shall pay it at the same time when the results of the work are delivered; where only part of the work results is delivered, the ordering party shall make corresponding payment. Article 264 Where the ordering party fails to pay the remuneration or the price for the materials and etc., the contractor shall have the right to lien upon the results of the work, except as otherwise agreed upon by the parties. Article 265 The contractor shall keep in a proper storage the materials supplied by the ordering party and the work results completed, and the contractor shall be liable for damages if they are destroyed, damaged or lost due to improper storage. Article 266 The contractor shall maintain confidentiality according to the requirements of the ordering party and may not, without permission thereby, withhold and preserve the duplicates or technical materials. Article 267 Co-contractors shall bear joint and several liability to the ordering party, except as otherwise agreed upon by the parties. Article 268 The ordering party may rescind the contract at any time, but it shall bear the liability for making compensation for losses, if the contractor suffers losses therefrom. Chapter 16 Contracts for Construction Projects Article 269 A construction project contract refers to a contract whereby the
contractor undertakes the construction of the project and the contract letting
party pays the cost and remuneration. Article 270 Construction project contracts shall be in written form. Article 271 The invitation and submission of tenders to a construction project shall be proceeded openly, equally and fairly according to the provisions of relevant laws. Article 272 The contract letting party may enter into a construction project
contract with a general contractor, or enter into a survey contract, design
contract or construction contract with a surveyor, designer or constructor
respectively. Article 273 Contracts for major construction projects of the State shall be concluded in accordance with the procedures prescribed by the State and the investment plans, feasibility study reports and other documents approved by the State. Article 274 The contents of a survey or design contract shall contain such clauses as the time limit for submission of the relevant basic materials and documents (including estimated budgets), the quality requirements, the expenses and other terms for cooperation. Article 275 The contents of a construction contract shall contain such clauses as the scope of the construction, time period for the construction, the time for beginning and completing the intermediate construction projects, the quality of the construction, the cost of the construction, the time for submission of technical data, the responsibility for supply of materials and equipment, the allocation of funds and settlement of accounts, the inspection and acceptance of the project upon completion, the scope for guaranteed maintenance and repair and the quality guaranty period, the mutual cooperation of the two parties. Article 276 Where supervision is practiced in respect of a construction project, the contract letting party shall enter into a written supervision commission contract with a supervisor. The rights, obligations and legal liabilities of the contract letting party and the supervisor shall be in accordance with the provisions on commission contracts of this Law and other relevant laws and administrative regulations. Article 277 The contract letting party may inspect the operation progress and quality at any time provided not hampering the contractor from normal operation. Article 278 Before covering a project which needs to be covered, the contractor shall notify the contract letting party to inspect the project. If the contract letting party fails to inspect it in time, the contractor may prolong the construction period, and shall have the right to request the contract letting party for compensation for losses caused by work stoppages and idling of the labour force, etc. Article 279 Upon completion of a construction project, the contract letting party shall inspect and accept the projects in time according to the construction drawings and specifications as well as the construction inspection rules and quality standards issued by the State. If qualified, the contract letting party shall pay the costs and remuneration and accept the construction project according to the terms of the contract. A construction project may not be delivered for use until it is qualified through inspection and acceptance. A construction project may not be delivered for use without inspection and acceptance or proved to be unqualified through inspection and acceptance. Article 280 Where the quality of survey or design work is not in conformity with the requirements, or the survey or design documents are not submitted in due time, thus delaying the construction period and causing losses to the contract letting party, the surveyor or designer shall continue to complete the survey or design, reduce or do not charge the survey and design fees, and make compensation for the losses. Article 281 If, due to the causes of the constructor, the construction quality does not conform to the terms of the contract, the contract letting party shall have the right to request the constructor to repair or reconstruct results in overdue delivery of the project, the constructor shall be liable for the breach of contract. Article 282 If, due to causes of the contractor, personal injury and property losses have occurred within the period of reasonable use of the construction project, the contractor shall be liable for damages. Article 283 If the contract letting party has not supplied the raw materials, equipment, sites, funds or technical data according to the agreed time and requirements in the contract, the contractor may prolong the construction period and shall have the right to request for compensation for the losses caused by work stoppages and idling of the labour force, etc. Article 284 If, due to the causes of the contract letting party, a construction project pauses or is postponed in the course, the contract letting party shall adopt measures to offset or reduce the losses and compensate the contractor for losses and actual expenses incurred as a result of work stoppages, idling of the labour force, changes in transportation, transfer and move of machinery and equipment, overstocking of materials and components, etc. Article 285 If, due to modification of the plan, or inaccuracy of the data supplied or a failure in providing the necessary conditions for survey and design work has to be redone or stopped, or the design revised, the contract letting party shall pay additional expenses for the amount of work actually rendered by the surveyor or designer. Article 286 If the contract letting party fails to pay the costs and remuneration accordance with the terms of the contract, the contractor may urge the contract letting party to pay the money within a reasonable time limit. If the contract letting party fails to pay within the time limit, except that it is not appropriate to convert the construction project into money or auction it due to its characters, the contractor may consult with the contract letting party to convert the project into money, or apply to the people's court to auction the project according to law. The costs and remuneration of the construction project shall be compensated in priority by the money derived from the conversion or auction. Article 287 Matters not addressed in this Chapter shall apply the relevant provisions on contracts for work. Chapter 17 Contracts for Transportation Section 1 General Rules Article 288 A transportation contract refers to a contract whereby the carrier carries passengers or goods from the starting place of carriage to the agreed destination, and the passenger or the shipper or the 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 shipper. Article 290 A carrier shall carry the passenger or goods safely to the agreed destination within the agreed time period or within a reasonable time period. Article 291 A carrier shall carry the passenger or goods to the agreed destination via the agreed or customary carriage route. Article 292 A passenger or a shipper or a consignee or a consignee shall pay for the ticket-fare or for the freight. Where a carrier has not taken the agreed route or a customary carriage route, and consequently increased the ticket-fare or the freight, the passenger or the shipper or the consignee may refuse to pay for the increased part of the ticket-fare or the freight. Section 2 Contracts for Passenger Transportation Article 293 A passenger transportation contract shall be established at the time when the carrier delivers the ticket to the passenger except as otherwise agreed upon in the contract by the parties or there are other transaction practices. Article 294 A passenger on board shall hold a valid ticket. A passenger on board without a ticket or exceeds the distance paid for or takes a higher class or higher berth than booked or holds an invalid ticket, shall make up the payment for an appropriate ticket. The carrier may charge an additional payment according to the rules. Where the passenger refuses to make such a payment, the carrier may refuse to undertake the carriage. Article 295 A passenger unable to embark on the time stated on the ticket due to his/her own fault, shall go through ticket cancellation and refund for malities or ticket modification formalities 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 assume the obligation of carriage. Article 296 A passenger shall bring with him/her luggage within the agreed limit of quantity. A passenger takes luggage exceeding the limit shall check in the luggage. Article 297 A passenger may not bring with him/her or pack in the luggage
such dangerous articles as are inflammable, explosive, corrosive or radioactive
as well as those that might endanger the safety of life and property on board
the transportation vehicle or other contraband articles.
Article 298 A carrier shall inform the passengers in time of the important causes with hinders the normal carriage and the matters which shall be noted for purpose of safety carriage. Article 299 A carrier shall carry passengers in conformity with the time and the carriage schedule stated on the ticket. A carrier delaying the carriage shall arrange the passengers to take other flights or numbers, or refund the tickets as requested by the passengers. Article 300 A carrier unilaterally changing the carriage vehicle and consequently lowering the standards of service shall refund the ticket or lower the price of the ticket as requested by the passenger. A carrier unilaterally raising the standards of service, shall not charge additional ticket-fare. Article 301 A carrier shall, during the period of carriage, render whatever help and assistance as it can to a passenger who is seriously ill, or who is giving birth to a child or whose life is at risk. Article 302 A carrier shall be liable for damages for the death of or
personal injury to passengers during the period of carriage, unless the death or
personal injury results from the health conditions of the passenger
himself/herself, or the carrier proves that the death or personal injury is
caused by the deliberate intention or gross fault of the passenger.
Article 303 Where an article that the passenger takes with him/her on board
is damaged or destroyed during the period of carriage, the carrier shall be
liable for the damage if it has committed fault.
Section 3 Contracts for Goods Transportation Article 304 A shipper, when handling the formalities for goods carriage,
shall precisely indicate to the carrier, the title or name of the consignee or
consignee by order, the name, nature, weight, amount and the place for taking
delivery of the goods, and other information necessary for goods carriage.
Article 305 Where such formalities as examination and approval or inspection are required for goods carriage, the shipper shall submit the documents of fulfillment of the relevant formalities to the carrier. Article 306 A shipper shall pack the goods in the agreed manner. Where there
is no agreement in the contract as to the manner of packing or such agreement is
unclear, the provisions of Aritcle 156 of this Law shall be applied.
Article 307 When shipping such dangerous articles as are inflammable,
explosive, corrosive or radioactive, a shipper shall appropriately pack the
articles in conformity with the rules of the State governing the carriage of
dangerous articles, and put on the marks and labels for dangerous articles and
submit the written papers relating to the nature and measures of precaution to
the carrier. Article 308 Prior to the delivery of goods to the consignee by the carrier, the shipper may request the carrier to suspend the carriage, to return the goods, to alter the destination or to deliver the goods to another consignee. The shipper shall compensate the carrier for losses thus caused. Article 309 After the goods carriage is completed, if the carrier has the knowledge of the consignee, it shall notify the consignee promptly and the consignee shall claim the goods promptly. Where the consignee claims the goods exceeding the time limit, it shall pay to the carrier for such expenses as storage of the goods, etc. Article 310 When claiming the goods, a consignee shall inspect the goods within the agreed time limit in the contract. Where there is no agreement in the contract on the time limit or such agreement is unclear, nor can it be determined according to Article 61 of this Law, the consignee shall inspect the goods within a reasonable time limit. The failure of the consignee to make any claims on the amount, damage or losses of the goods within the agreed time limit or within a reasonable time limit, shall be deemed as the preliminary evidence that the carrier has delivered the goods in conformity with the statements indicated on the carriage documents. Article 311 A carrier shall be liable for damages for the damage to or destruction of goods during the period of carriage unless the carrier proves that the damage to or destruction of goods is caused by force majeure, by inherent natural characters of the goods, by reasonable loss, or by the fault on the part of the shipper or consignee. Article 312 The amount of damages for the damage to or destruction of the goods shall be the amount as agreed on in the contract by the parties where there is such an agreement. Where there is no such an agreement or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, the market price at the place where the goods are delivered at the time of delivery or at the time when the goods should be delivered shall be applied. Where the laws or administrative regulation stipulate otherwise on the method of calculation of damages and on the ceiling of the amount of damages, those provisions shall be followed. Article 313 Where more than one carriers take a connect carriage in the same manner of transportation, the carrier who concludes the contract with the shipper shall bear the liability for the entire transport. Where loss of goods occurred in a specific section, the carrier who concludes the contract with the shipper and the carrier who is responsible for the specific section shall bear joint and several liability. Article 314 Where the goods are destroyed due to force majeure during the period of carriage and the freight has not been collected, the carrier may not request the payment of the freight. Where the freight has been collected, the shipper may request the refund of the freight. Article 315 Where the shipper or the consignee fails to pay the freight, storage expense and other carriage expenses, the carrier is entitled to lien on the relevant carried goods except as otherwise agreed upon in the contract. Article 316 Where the consignee is unclear or the consignee refuses to claim the goods without justified reasons, the carrier may have the goods deposited according to the provisions of Article 101 of this law. Section 4 Contracts for Multi-modal Transportation Article 317 A multi-modal transportation business operator shall be responsible for the performance or the organizing of performance of the multi-modal transportation contract, enjoy the rights and assume the obligations of the carrier for the entire transport. Article 318 A multi-modal transportation business operator may enter into agreements with the carriers participating in the multi-modal transportation in different section of the transport on their respective responsibilities for different sections under the multi-modal transportation contract. Article 319 A multi-modal transportation business operator shall issue multi-modal transportation documents upon receiving the goods from the shipper. The multi-modal transportation documents may be negotiable or non-negotiable, as requested by the shipper. Article 320 Where a multi-modal transportation business operator suffers losses due to the fault of the shipper when shipping the goods, the shipper shall bear the liability for damages even if the shipper has transferred the multi-modal transportation documents to other parties. Article 321 Where the damage to, destruction or loss of goods occurres in a specific section of the multi-modal transportation, the liability of the multi-modal transportation business operator for damages and the limit thereof shall be governed by the relevant laws on the specific model of transportation used in the specific section. Where the section of transportation in which the damage or destruction or loss occurred can not be identified, the liability for damages shall be governed by the provisions of this Chapter. Chapter 18 Contracts for Technology Section 1 General rules Article 322 A technology contract refers to a contract that the parties conclude for purpose of establishing rights and obligations of the parties regarding technology development, technology transfer, technical consultancy and technical services. Article 323 The conclusion of a technology contract must facilitate the progress of science and technology, accelerate the commercialization, application and dissemination of the achievements of science and technology. Article 324 The contents of technology contract shall be agreed upon by the
parties, and shall contain the following clauses in general:
Article 325 The method of payment of price, remuneration or royalties in the
technology contract shall be agreed upon by the parties. The parties may agree
on the method of an overall calculation and one time payment, or of an overall
calculation and payment by installment. They may also agree on the method of
proportionate payment or such payment plus an advance payment of entrance fee.
Article 326 Where the right to use or to transfer a job-related technological
achievement belongs to the legal person or other organization, the legal person
or other organization may conclude technology contracts with regard to the
job-related technological achievement. The legal person or other organization
shall extract a certain proportion from the proceeds acquired from the use and
transfer of such job-related technological achievement to reward or remunerate
the individual who accomplished this technological achievement. Where a legal
person or other organization concludes a technology contract to transfer the
job-related technological achievement, the individual who accomplished this
technological achievement shall have the priority to be the transferee on equal
conditions. Article 327 The right to use or transfer a non-job-related technological achievement belongs to the individual who accomplished it. The individual may conclude a technology contract on such non-job-related technological achievement. 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. Article 329 A technology contract which monopolizes the technology or impedes the technological progress, or which infringes upon the technological achievement of others shall be null and void. Section 2 Contracts for Technology Development Article 330 A technology development contract refers to a contract concluded
between the parties for purpose of conducting research in and development of new
technologies, new products, new processes and new materials as well as their
systems. Article 331 The commissioning party to a commissioned development contract shall pay for the research and development expenses and the remuneration, supply technological materials and original data, accomplish coordinating tasks and accept the result of research and development on time according to the terms of the contract. Article 332 The party responsible for research and development shall, according to the terms of the contract, formulate and implement a research and development plan, use the research and development budget in a reasonable way, complete the research and development on time, deliver the achievement according to the schedule, provide relevant technological materials and necessary technical guidance and assist the commissioning party in mastering the achievement of the research and development. Article 333 Where the commissioning party violates the contract and causes a standstill, delay or failure in the research and development work, such party shall be liable for the breach of contract. Article 334 Where the party responsible for research and development violates the contract and causes a standstill, delay or failure in the research and development work, such party shall be liable for the breach of contract. Article 335 Parties to a cooperative development contract shall, make the investment according to the terms of the contract including making investment by way of technology contribution, taking part in the research and development in light of the division of labor according to the terms of the contract, and cooperating with other parties to the contract in the research and development wor |