Contract Law of the People's Republic of China
Author:sipoIssuing Date:2008-01-24 13:28:30Source:sipo
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.
The counterpart may urge the principal to ratify it within one month. It shall be regarded as a refusal of ratification that the principal 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.
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:
(1) A contract is concluded through the use of fraud or coercion by one party to damage the interests of the State;
(2) Malicious collusion is conducted to damage the interests of the State. A collective or a third party;
(3) An illegitimate purpose is concealed under the guise of legitimate acts;
(4) Damaging the public intersts;
(5) Violating the compulsory provisions of the laws and administrative regulations.
Article 53 The following immunity clauses in a contract shall be null and void:
(1) those that cause personal injury to the other party;
(2) those that cause property damages to the other party as a result of deliberate intent or gross fault.
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:
(1) those concluded as a result of serious misunderstanding;
(2) those that are obviously unfair at the time when concluding the contract.
If a contract is concluded by one party against the other party's true intentions through the use of fraud, coercion or exploitation of the other party's unfavorable position. The injured party shall have the right to request the people's court or an arbitration institution to modify or revoke it.
Where a party requests for modification, the people's court or the arbitration institution may not revoke the contract.
Article 55 The right to revoke a contract sahll extinguish under any of the following circumstances:
(1) A party having the right to revoke the contract fails to exercise the right within one year from the day that it knows or ought to know the revoking causes;
(2) A party having the right to revoke the contract explicitly expresses or conducts an act to waive the right after it know the revoking causes.
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.
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