Civil Code - Contracts

(The following clauses are selected from The Civil Code of the People’s Republic of China translated by Steve Li and Robert Zhang, international arbitration lawyers registered in Shanghai, China, and published by Kindle Unlimited.)

Article 502 A legally concluded contract shall become valid upon its conclusion unless otherwise specified by law or agreed by the parties.

A contract shall be subject to approval or any other procedure if required by laws and administrative regulations. Where a contract does not become valid due to failure to complete approval or any other procedure as required, the terms in respect of the obligations to obtain approval and other terms relating thereto under the contract shall remain in force nevertheless. Where the party obligated to complete approval or any other procedure fails to perform its obligations, the party may be held liable for breach of the obligations.

Where approval or any other procedure is required for the alteration, transfer, or termination of a contract in accordance with laws and administrative regulations, the preceding paragraph shall apply.

Article 503 Where an unauthorized agent enters into a contract in the name of the principal, the principal's commencement to perform its obligations under the contract or acceptance of the performance by the other party to the contract shall be deemed the principal's ratification of the contract.

Article 504 Where the legal representative of a legal entity or the principal person of an unincorporated entity enters into a contract beyond their authority, their representation shall be valid and the contract shall be legally binding on the legal entity or the unincorporated entity unless the other party to the contract knew or had reason to know that the conclusion of the contract was beyond the authority of such legal representative or principal person.

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Article 735 A financing lease contract is an agreement whereby the lessor purchases the property of the lessee's choice from the seller of the lessee's choice and leases such property to the lessee, and the lessee pays the rent therefor.

Article 736 The terms of a financing lease contract shall generally cover the name, quantity, specifications, technical performance, manner of inspection, and lease term of the leased property, the calculation, terms of payment, and currency of the rent, the ownership of the leased property upon the expiration of the lease term, and other necessary information.

A financing lease contract shall be made in writing.

Article 737 A financing lease contract shall be invalid if the subject matter thereunder does not exist.

Article 738 Where an administrative license is required for the use of the leased property for business operations in accordance with laws and administrative regulations, the lessor's failure to obtain an administrative license as required shall be without prejudice to the validity of the financing lease contract.

Article 739 Where a sales contract is entered into by the lessor with the seller of the lessee's choice with respect to the property to be leased of the lessee's choice, the seller shall deliver the subject matter to the lessee as agreed, and the lessee shall be entitled to accept the subject matter as if it were the buyer.

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Article 761 A factoring contract is an agreement whereby the obligee transfers its existing or future accounts receivable to the factor, and the factor provides financing, management or collection of accounts receivable, security for payment of accounts receivable by the obligor, and other services.

Article 762 The terms of a factoring contract shall generally cover the type of business, scope and period of service, information on the underlying transaction contracts and the accounts receivable, factoring proceeds or service remuneration, terms of payment, and other necessary information.

A factoring contract shall be made in writing.

Article 763 Where an obligee enters into a factoring contract with a factor in respect of accounts receivable forged by the obligee and the obligor, the obligor shall not plead nonexistence of the accounts receivable as a defense against the factor unless the factor knew that the accounts receivable were forged.

Article 764 A factor shall indicate its identity as a factor in, and attach necessary documents to, any notice of accounts receivable transfer sent to an obligor of accounts receivable.

Article 765 Where the obligee and the obligor of accounts receivable agree through negotiation to alter or terminate the underlying transaction contract without due cause after the obligor receives a notice of accounts receivable transfer, the alteration or termination shall not be binding on the factor if it has an adverse effect on the factor.

Article 967 A partnership contract is an agreement whereby two or more partners share the interests and risks as a joint enterprise.

Article 968 Each of the partners shall perform their obligations of contribution in the manner and amount and according to the payment terms as agreed.

Article 969 The partners' contributions and the profits and other properties legally obtained from the business operations of the partnership shall be its partnership property.

No partner may claim severance of the partnership property before the termination of the partnership contract.

Article 970 Any decision made by the partners on partnership affairs shall be unanimously agreed upon by all the partners unless otherwise agreed under the partnership contract.

Partnership affairs shall be jointly managed by all the partners. One or more partners may be authorized to manage the partnership affairs as agreed under the partnership contract or upon a decision by all the partners, in which case the other partners will be relieved from but may supervise the management of the partnership affairs.

Where the partners manage the partnership affairs separately, any managing partner may object to the management by other managing partners and other partners shall suspend the management of such affairs.