Contract Law of the People's Republic of China
Author:sipoIssuing Date:2008-01-24 13:28:30Source:sipo
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.
Standard terms are clauses which are prepared in advance for general and repeated use by one party and which are not negotiated with the other party in concluding a contract.
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:
(1) disguising and pretending to conclude a contract, and negotiating in bad faith;
(2) concealing deliberately the important facts relating to the conclusion of the contract or providing deliberately false information;
(3) performing other acts which violate the principle of good faith.
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.
With regard to contracts which are subject to approval or registration as provide for by the laws or administrative regulations, the provisions thereof shall be followed.
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.
To unfairly prevent the conditions from being accomplished by one party for its own interests shall be regarded as those conditions have been accomplished. To unfairly promoting the accomplishment of such conditions by one party shall be regarded as non-accomplishment.
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.
The counterpart may urge the statutory agent to ratify the contract within one month. It shall be regarded as a refusal of ratification that the statutory agent does not make any expression. A bona fide counterpart has the right withdraw it before the contract is ratified. The withdrawal shall be made by means of notice.
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