Outline to the Contract Lawof CHINA

Chunli He

Section1 Development of Contract Law in China

On March 15, 1999, the Contract Law of the People’sRepublic of China was adopted by the Second Session of the Ninth NationalPeople’s Congress and scheduled to take effect on October.

The Contract Law contains general provisions ,applicable to all contracts in chapters 1-8,as well as specific provisionrelating to 15 types of contracts.

The Contract Law unifies and improve upon China ‘sthree previous Contract Laws, i.e. The Economic Contract Law , the ForeignEconomic Contract Law ,the Technology Contract law . The Contract Law seeks toestablish a more advanced, systematic, and comprehensive contract law to suitthe particular needs of China ‘s transitional economy. The contract lawdemonstrated a desire to progress towards a market-driven economy and away fromstate control.

Compared to the three former contract laws, the scopeof application of the unified contract law has been appropriately widened tocover a broader range of the contracts.

Section 2 Concept of Contract

When the Common Law and Continental Civil lawdefinitions of contract are compared, the definition of contract in Continental Civil Law is more abstract. It isbased on expression of the parties’ intent (or translated as “expression ofwill”)

Article 2 of the 1999 Contract Law defines contract asan agreement establishing, modifying and terminating the relations of civilrights and obligations between natural persons, legal persons or otherorganizations of equal status.

The seemingly plain and straightforward definition ofcontract in article 2 includes the following element.

Firstly, contract is an agreement. The notion ofagreement means that the legal effect of contract arises from the will of theparties , rather than from operation of state law or policy. The essence ofcontract is the autonomy of parties and freedom of contract.

Secondly, the parties that can enter into a contractare natural persons, legal person or other organizations. Natural person refersto Chinese citizens, foreigners as well as stateless person. Legal person is anassociation that has capacity for civil rights and civil conducts , independentenjoys civil rights and assumes civil obligations in accordance with the law.Other organizations  would mean toinclude those organizations that are formed under the law with certain assetsand organizational structure, but have no independent civil ability and capacity.legal person is different from other organizations in that a legal personindependently bears civil responsibilities while an other organization doesnot.

Thirdly, the parties to a contract are equal parties.The reference to equal parties serves to exclude from the concept of contractthose agreement that arise from administrative relationships.

Fourthly contract is an agreement establishing, modifyingand terminating relationship of civil rights and duties.

Section 3 FundamentalPrinciples of China’s Contract Law

The fundamental doctrines of Chinese Contract law areset out in articles 3 to 7 of the contract law. They are the principles ofequality, freedom of contract, good faith, pacta sunt servanda, public policyand fostering transactions.

Freedom of Contract

The essential elements of the doctrine of freedom ofcontract under Chinese Law include：thefreedom to make a contract or not to make any contract; the freedom to choosewith whom one should contract; the freedom to decide the contents of thecontract; the freedom to decide the mode in which the contract is to be made;the freedom to stipulate the remedies for a breach, and the freedom to decidethe dispute resolution mechanism to be stipulated into the contract. Theprinciple of freedom of contract governs every stage of the contracting processand is in many ways the most crucial of all contract law principles.

A major reflections of the contract law adoption offreedom of contract is that it has limited the mandatory provision in theprevious contract laws and, at the same time, broadened the scope of electiveprovision.  many articles of the contractlaw include the important qualifier “except where the parties have otherwiseagreed”, indicating the law’s respect for the parties’ free will.

Doctrine of good faith

“Good faith” isthe highest principle in Continental Civil Law System. Article 6 of the ChineseContract Law provides that the parties shall observe the principle of honestyand good faith in exercising their rights and performing their obligations.

This doctrine aims to balance the interests betweenthe parties, as well as interests of the parties and the society at large. Whenapplied between the parties ,it requires them to respect each other. As regardsthe society at large, it prevents the parties from prejudicing public interest.It not only balance the interest between the parties, but also safeguards thesocial interest, such that the market can operate in an orderly manner. Thedoctrine of good faith is considered in line with the highest ideals of humansociety.

In China , the Contract Law requires the contractingparties to exercise their rights and fulfill their duties in strict accordancewith the principle of good faith, not only at the stages of contract formation,performance, modification and termination, but also after the contractualrelationship is terminated.

Pacta sunt servanda

Once a contract is formed, the parties must strictlyobserve and comply with the contract. This doctrine is known as pacta suntservanda. article 8(1)the contract law provides that a lawfully establishedcontract shall be legally binding on the parties thereto, who shall eachperform its own obligations in accordance with the terms of the contract, andno party shall unilaterally modify or terminate the contract.

The principle of fostering transactions

A transaction is an exchange of property or otherforms of interest between independent entities or individuals in themarketplace. Transaction must be encouraged so that economic efficiency and theoverall wealth of society can be increased. Voluntary transactions can allowresources to go to the party who valued them the most. This party can in turnuse the resources to produce the greatest value. Thus , although, contract lawitself can not create social wealth, it can foster efficient transactions.

The China‘s Contract Law has embodied the principle offostering transactions in the following major respects:

i．Ruleson contract  formation

The contract law’s rules on offer and acceptance aredesigned to facilitate formation of contracts and transactions. for instance,according to the traditional continental theory, offer and acceptance must beidentical in their contents. A reply that adds to , limits or modifies theoriginal offer is equal to a refusal of the offer, this traditional view hascome to be regarded as unfavorable to the fostering of transactions. The UniteNations Convention on the International Immaterial contents of the offer andthe offeror does not promptly manifest her objection, the contract shall bedeemed as formed, the same rule has been adopted by article 31of the ChinaContract Law.

ii．Form of a contract

In the spirit of fostering transactions, China’sContract Law has adopted the view that the form of a contract is evidence forthe contract’s existence, rather than a criterion in deciding whether thecontract has been formed. article 10 of the Contract Law provides that “forparties to form their contract, there are written, oral, and other forms”

iii．Contract formation and validity are different,contract formation refers to the completion of the process whereby the partiesthrough equal consultation come to agree on the terms of their contemplatedtransaction. However, a contract does not automatically become valid as it isformed . contract validity largely depends on the states’ attitude to the contractin question. In other words , contract formation is mainly governed by theparties’ free will .in contrast, contract validity chiefly reflects the state’sevaluation of and intervention in contractual relationships.

China ‘s Contract Law follows the principle offostering transactions in designing its rules on contract validity. Forinstance, the law allows various ways to validate a contract despite itsdeficiencies.In addition to listing four special types of invalid contracts ,the contract law explicitly provides that invalid contract are those thatviolate mandatory provisions of a law or administrative regulation.

The principle of public policy

The doctrine denotes good customs and public order ,meaning that juristic acts must conform to the mainstream moral and ethicalstandard of the society. Civil acts that are contrary to the doctrine of publicpolicy are legally void. In the field of juristic acts, it restricts theautonomous space of individuals and prohibits any attempt to attain individualachievement by sacrificing social morality.

中国合同法概要

何春丽

第一部分  中国合同法的发展

1999年3月5日第九届全国人大第二次会议通过了中华人民共和国合同法，该法于1999年10月1日生效。

合同法包括总则和分则，总则适用于全部合同，分则适用于15种典型合同（有名合同）。合同法统一和完善了中国之前的三部合同法即经济合同法、涉外经济合同法、技术合同法。合同法具有先进性、系统性、综合性，更适合中国经济的需求。合同法表明了促进交易、减少国家干预的愿望。

与前三部合同法相比，合同法的适用范围适当宽泛。

第二部分  合同的概念

   对比普通法和大陆法的合同概念，大陆法中合同的概念更加抽象，其以当事人的意思表示为基础。

   合同法第二条定义合同是自然人、法人、其他组织之间建立、修改、终止民事权利和义务关系的协议。看似朴素、直接的定义包含下列因素：

   1、合同是一个协议，协议意味着合同的效力来源于双方的意思，而不是国家法律或政策，合同的本质是当事人意思自治。

   2、签订合同的当事人是自然人、法人或其他组织。自然人指公中国公民、外国人和无国籍人。法人是具有民事权利能力和民事行为能力的组织、独立享有民事权利、独立承担民事义务。其他组织是依法设立、拥有一定资产、拥有组织结构的组织，其他组织不具有独立的民事能力。

   3、合同当事人之间的地位是平等的，这一点区别于源于行政管理关系的协议。

   4、合同是建立、修改、终止民事权利和义务的协议。

第三部分  中国合同法的基本原则

   中国合同法的基本原则在合同法第三条到第七条规定，这些原则是平等原则、自由原则、诚实守信原则、条约必须遵守原则、公共政策原则、鼓励交易原则

  合同自由原则

   中国合同法合同自由原则包括：签订或不签订合同的自由、选择与谁签订合同的自由、决定合同内容的自由、决定合同形式的自由、违约救济自由、争议解决机制的自由。合同自由原则贯穿合同全过程，是最重要的合同法原则。

   合同自由原则限制了以前合同法的强制性规定，同时，拓宽了生效规定的范围。合同法中的“当事人另有约定的除外”就是当事人意思自治的体现

   诚实守信原则

   诚实守信是大陆民法体系中最高原则。中国合同法第六条规定当事人遵循诚实守信原则履行权利和义务。

   诚实守信原则的目的是平衡当事人之间、当事人与社会之间的利益。它阻止当事人偏离公共利益。它不仅保护当事人之间的利益还保护社会利益以便市场有序进行。

   中国合同法不仅要求当事人在合同订立、履行、修改、终止时要遵守诚实信用原则，还要求在合同终止后也要遵守诚实守信原则。

   条约必须遵守原则

   合同一旦成立，当事人必须严格遵守。合同法第八条规定合法成立的合同对各方当事人均具有约束力，每方当事人按照合同约定履行各自的义务。任何一方当事人不得单方修改、终止该合同。

   鼓励交易原则

   交易是市场上财产或其他利益在独立实体或个人之间的交换。鼓励交易有利于提高经济效用和社会整体财富。自愿的交易允许资源流向能够增加其价值的当事人。合同法本身不创造社会财富，但它可以促进有效的交易。中国合同法主要在下列方面体现鼓励原则

   1、合同成立的规则

   合同法关于要约、承诺的原则便于合同的成立。例如：按照传统大陆法理论，要约和承诺的内容必须完全一致，任何对要约的增加、限制、修改都等于对要约的拒绝。联合国公约规定受要约人对要约进行非实质性修改，如要约人没有迅速反对，合同视为成立。我国合同法采用了联合国公约的规定。

   2、合同的形式

    体现鼓励交易原则，中国合同法采纳了“合同的形式是合同是否存在的证据而不决定合同是否成立”。中国合同法第十条规定设立合同的形式，有书面、口头或其他形式。

   3、合同成立与生效是不同的，合同成立是当事人通过平等协商达成的协议的过程。合同不能在成立时自动生效，合同效力主要取决于国家对该合同的态度。换言之，合同成立主要受控于当事人的自由意愿；合同生效主要反映国家对合同关系的评价和干预。

    中国合同法鼓励合同生效，除列明的无效合同外。中国合同法明确规定违反法律、行政法规强制性规定的合同无效。

   公共政策原则

   公共政策原则表明公正的行为必须符合社会主流和道德标准。与公共政策相反的民事行为是无效的。这个原则限制了个人的意思空间、禁止牺牲社会道德达到个人利益的企图。

ChunliHe

SeniorPartner of Beijing Yingke Law Firm Changchun Office

Email：hechunli@aliyun.com

Mobile：13039005163

Fax：0431-85210691

MajorPractice Areas

1．  Legal advicer

2．  Company recombination and M﹠A

3．  Go listing, investment and financing

4．  Foreign Law including Foreign DirectInvestment and Indirect Investment, Overseas M﹠A,International Trade.

5．  Real Estate and Construction Law

Educationexperiences

Master of Law of RenminUniversity of China

Bachelor of Economics of Jilin University  

Socialposition

Part-time Professor in Jilin University

Languages

English ,Chinese

Qualifications

Qualification of Securities Practice ;Qualification of Independent Director.

Qualification of bankruptcy management,Qualification of advanced engineering cost management

Workingexperiences

1.     July 1987-May 1994     Lecturer of EnterpriseManagement

2.     July1994- July 1997     Manager of Car Sells Company

3.     July1997-May 2002     Lecturerof International Business Law in Changchun                                              

Industry University

4.     July 2002- Now         PracticingLawyer

何春丽

北京盈科（长春）律师事务所 高级合伙人

电邮：hechunli@aliyun.com

手机：13039005163

传真：0431-85210691

擅长领域：

       1、常年法律顾问

2、公司重组与并购

       3、上市及投融资

4、涉外法律事务包括外商投资、国际贸易、境外并购

       5、房地产与建筑工程

教育经历：

中国人民大学法学院   经济法硕士

吉林大学              经济学学士

社会兼职：

吉林大学兼职教授

工作语言：

中文、英文

资格：

上市公司独立董事、证券从业资格、企业破产管理人资格、高级工程成本管理师

工作经历：

1、1987年7月至1994年5月 企业管理讲师

2、1994年5月至1997年7月  汽车销售公司经理

3、1997年7月至2002年5月 长春工业大学国际经济法教师

4、2002年7月至今 执业律师