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CONTRACT LAW OF THE PEOPLE'S REPUBLIC OF CHINA

(Adopted and Promulgated by the Second Session of the Ninth National People's

Chapter Nineteen        Safekeeping Contracts

Article 365     Definition of Safekeeping Contract
A safekeeping contract is a contract whereby the depository keeps the deposit delivered by the depositor, and eventually returns it thereto.

Article 366     Safekeeping Fee
The depositor shall pay the safekeeping fee to the depository in accordance with the contract.
Where the safekeeping fee was not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, the safekeeping is gratuitous.

Article 367     Formation of Safekeeping Contract
A safekeeping contract is formed upon delivery of the deposit, except otherwise agreed by the parties.

Article 368     Deposit Voucher
Upon the depositor's delivery of the deposit to the depository, the depository shall issue a deposit voucher thereto, except otherwise provided by the relevant usage.

Article 369     Place and Manner of Safekeeping
The depository shall keep the deposit with due care.

The parties may prescribe the place and manner of safekeeping. The place and manner of safekeeping may not be changed without authorization, except in an emergency situation or for the purpose of safeguarding the depositor's interests.

Article 370     Depositor's Obligation to Inform
Where the deposit delivered by the depositor has defects or requires special safekeeping measures in light of its nature, the depositor shall inform the depository of the relevant situation. Where the depositor failed to inform, thereby causing damage to the deposit, the depository is not liable for damages; where the depository sustains any loss as a result, the depositor shall be liable for damages, except where the depository was, or should have been, aware of the situation and failed to take remedial measures.

Article 371     Delegation of Safekeeping Prohibited Except with Prior Agreement
The depository may not delegate safekeeping of the deposit to a third person, except otherwise agreed by the parties.
Where the depository delegated safekeeping of the deposit to a third person in violation of the previous paragraph, thereby causing damage to the deposit, the depository shall be liable for damages.

Article 372     Use of Deposit Prohibited Except with Prior Agreement
The depository may not use, or allow to be used, the deposit, except otherwise agreed by the parties.

Article 373     Depository's Obligations in Case of Third Party Claim
Where a third person makes a claim on the deposit, the depository shall perform its obligation of returning the deposit to the depositor, except where an order of preservation or enforcement is carried out in respect of the deposit in accordance with the law.
Where a third person has initiated a suit against the depository or has applied for attachment of the deposit, the depository shall timely notify the depositor.

Article 374     Depository Liable in Case of Damage or Loss; Exception
If the deposit was damaged or lost due to improper safekeeping by the depository during the deposit period, the depository shall be liable for damages, provided that if the safekeeping is gratuitous, and the depository has established that it was without gross negligence, it is not liable for damages.

Article 375     Depositor's Obligation to Declare Valuable Deposit
Where the depositor is to deposit money, securities, or any other valuable item for safekeeping, it shall make a declaration to the depository on such item, which shall be inspected or sealed by the depository. Where the depositor failed to make such declaration, upon damage to or loss of the deposit, the depository may indemnify the depositor to the extent of the value of a regular item.

Article 376     Retrieval of Deposit
The depositor may retrieve the deposit at any time.
Where a deposit period was not prescribed or clearly prescribed, the depository may require the depositor to retrieve the deposit at any time; where a deposit period was prescribed, absent special cause, the depository may not require the depositor to retrieve the deposit before the end of the deposit period.

Article 377     Depository's Obligation to Return Deposit and Fruit
At the end of the deposit period, or if the depositor retrieves the deposit before the end of the deposit period, the depository shall return the original item together with any fruit thereof to the depositor.

Article 378     Safekeeping of Fungible Items
Where the depository keeps money deposit, it may return money of the same type and quantity. Where the depository keeps any other fungible item, it may return any item of the same type, quality and quantity in accordance with the contract.

Article 379     Time of Payment of Safekeeping Fee
Under a safekeeping contract for value, the depositor shall pay to the depository the safekeeping fee at the prescribed time.
Where the time of payment of the safekeeping fee was not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, the safekeeping fee shall be paid at the same time the deposit is retrieved.

Article 380     Depository's Lien in Case of Non-payment
Where the depositor fails to pay the safekeeping fee and other expenses, the depository is entitled to a possessory lien on the deposit, unless otherwise agreed by the parties

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