Contract Law of the People's Republic of China
Author:sipoIssuing Date:2008-01-24 13:28:30Source:sipo
Article 401 The agent shall report the handling of the entrusted matters according to the requirements of the principal. The agent shall report the result of the entrusted matters when the commission contract is terminated.
Article 402 If within the scope of the power delegated by the principal, the agent, in his/her own name, concludes a contract with a third party, and the third party knows the proxy relationship between the agent and principal at the time of concluding the contract, the contract shall directly bind the principal and the third party, unless there are conclusive evidences to prove that the said contract only binds the agent and the third party.
Article 403 When an agent concludes a contract in his/her own name with a third party, and the third party does not know the proxy relationship between the agent and principal, and if the agent does not perform the obligation in respect of the principal due to causes of the third party, the agent shall disclose the third party to the principal. The principal hence may exercise the agent's rights against the third party, except that the third party will not conclude the contract with the agent if he knows the principal at the time of concluding the contract.
If the agent does not perform the obligations in respect of the third party due to causes of the principal, the agent shall disclose the principal to the third party. The third party hence may choose the agent or the principal as the counterpart to claim its rights, but the third party may not change the chosen counterpart.
Where the principal exercise the agent's rights against the third party, the third party may claim its demur in respect of the agent against the principal. Where the third party chooses the principal as its counterpart, the principal may claim its demur in respect party against the third party.
Article 404 The agent shall hand over to the principal the property obtained from handling the entrusted matters.
Article 405 When the agent has finished the entrusted matters, the principal shall pay remuneration to it. If, due to causes not attributable to the agent, the commission contract is rescinded or the entrusted matters cannot be finished, the principal shall pay the agent corresponding remuneration. If otherwise agreed upon in the contract, the terms of the contract shall be applied.
Article 406 In respect of a non-gratuitous commission contract, where the principal suffers from losses due to the fault of the agent, the principal may claim compensation for the losses. In respect of a gratuitous deliberate intention or gross fault of the agent, the principal may claim compensation for the losses.
Where the agent is ultra vires and causes losses to the principal, the agent shall compensate for the losses.
Article 407 If, in handling the entrusted matters, the agent suffers from losses due to causes not attributable to its own, the agent may request the principal to compensate for the losses.
Article 408 With the consent of the agent, the principal may entrust a third party other than the agent to handle the entrusted matters. In respect of losses thus incurred to the agent, the agent may request the principal to compensate for the losses.
Article 409 Where two or more agents jointly handle the entrusted matters, they shall assume joint and several liabilities to the principal.
Article 410 The principal or agent may rescind the commission contract at any time. The party who causes losses to the other party Due to the rescission of the commission contract shall, compensate for the losses, except for causes not attributable to the said party.
Article 411 A commission contract shall be terminated when the decease of the principal or agent occurs, or the principal or agent losses civil capacity of conduct or goes into bankruptcy, except as otherwise agreed upon by the parties in the contract or except that it is inappropriate to terminate the contract according to the characters of the entrusted matters.
Article 412 If the termination of a commission contract due to the principal's decease, loss of civil capacity of conduct or bankruptcy will harm the principal's interests, the agent shall continue to handle the entrusted matters before the principal's heir, statutory agent or liquidation group take over these matters.
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