CONTRACT LAW OF THE PEOPLE.doc

CONTRACT LAW OF THE PEOPLES REPUBLIC OF CHINA (Adopted and Promulgated by the Second Session of the Ninth National Peoples Congress March 15, 1999) GENERAL PRINCIPLES Chapter One General Provisions Article 1 Purpose This Law is formulated in order to protect the lawful rights and interests of contract parties, to safeguard social and economic order, and to promote socialist modernization. Article 2 Definition of Contract; Exclusions For purposes of this Law, a contract is an agreement between natural persons, legal persons or other organizations with equal standing, for the purpose of establishing, altering, or discharging a relationship of civil rights and obligations. An agreement concerning any personal relationship such as marriage, adoption, guardianship, etc. shall be governed by other applicable laws. Article 3 Equal Standing of Parties Contract parties enjoy equal legal standing and neither party may impose its will on the other party. Article 4 Right to Enter into Contract Voluntarily A party is entitled to enter into a contract voluntarily under the law, and no entity or individual may unlawfully interfere with such right. Article 5 Fairness The parties shall abide by the principle of fairness in prescribing their respective rights and obligations. Article 6 Good Faith The parties shall abide by the principle of good faith in exercising their rights and performing their obligations. Article 7 Legality In concluding or performing a contract, the parties shall abide by the relevant laws and administrative regulations, as well as observe social ethics, and may not disrupt social and economic order or harm the public interests. Article 8 Binding Effect; Legal Protection A lawfully formed contract is legally binding on the parties. The parties shall perform their respective obligations in accordance with the contract, and neither party may arbitrarily amend or terminate the contract. A lawfully formed contract is protected by law. Chapter Two Formation