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(Adopted and Promulgated by the Second Session of the Ninth National People's Congress on March 15, 1999 )
Article 9 Capacity; Contract through Agent
In entering into a contract, the parties shall have the appropriate capacities
for civil rights and civil acts.
A party may appoint an agent to enter into a contract on its behalf under the
law.
Article 10 Forms of Contract; Writing Requirement
A contract may be made in a writing, in an oral conversation, as well as in
any other form.
A contract shall be in writing if a relevant law or administrative regulation
so requires. A contract shall be in writing if the parties have so agreed.
Article 11 Definition of Writing
A writing means a memorandum of contract, letter or electronic message (including
telegram, telex, facsimile, electronic data exchange and electronic mail), etc.
which is capable of expressing its contents in a tangible form.
Article 12 Terms of Contract
The terms of a contract shall be prescribed by the parties, and generally include
the following:
(i) names of the parties and the domiciles thereof;
(ii) subject matter;
(iii) quantity;
(iv) quality;
(v) price or remuneration;
(vi) time, place and method of performance;
(vii) liabilities for breach of contract;
(viii) method of dispute resolution.
The parties may enter into a contract by referencing a model contract for the
relevant contract category.
Article 13 Offer-Acceptance
A contract is concluded by the exchange of an offer and an acceptance.
Article 14 Definition of Offer
An offer is a party's manifestation of intention to enter into a contract with
the other party, which shall comply with the following:
(i) Its terms are specific and definite;
(ii) It indicates that upon acceptance by the offeree, the offeror will be bound
thereby.
Article 15 Invitation to Offer
An invitation to offer is a party's manifestation of intention to invite the
other party to make an offer thereto. A delivered price list, announcement of
auction, call for tender, prospectus, or commercial advertisement, etc. is an
invitation to offer.
A commercial advertisement is deemed an offer if its contents meet the requirements
of an offer.
Article 16 Effectiveness of Offer, Offer through
Electronic Message
An offer becomes effective when it reaches the offeree.
When a contract is concluded by the exchange of electronic messages, if the
recipient of an electronic message has designated a specific system to receive
it, the time when the electronic message enters into such specific system is
deemed its time of arrival; if no specific system has been designated, the time
when the electronic message first enters into any of the recipient's systems
is deemed its time of arrival.
Article 17 Withdrawal of Offer
An offer may be withdrawn. The notice of withdrawal shall reach the offeree
before or at the same time as the offer.
Article 18 Revocation of Offer
An offer may be revoked. The notice of revocation shall reach the offeree before
it has dispatched a notice of acceptance.
Article 19 Irrevocable Offer
An offer may not be revoked:
(i) if it expressly indicates, whether by stating a
fixed time for acceptance or otherwise, that it is irrevocable;
(ii) if the offeree has reason to regard the offer as irrevocable,
and has undertaken preparation for performance.
Article 20 Extinguishment of Offer
An offer is extinguished in any of the following circumstances:
(i) The notice of rejection reaches the offeror;
(ii) The offeror lawfully revokes the offer;
(iii) The offeree fails to dispatch its acceptance at the end of
the period for acceptance;
(iv) The offeree makes a material change to the terms of the
offer.
Article 21 Definition of Acceptance
An acceptance is the offeree's manifestation of intention to assent to an offer.
Article 22 Mode of Acceptance; Acceptance by
Conduct
An acceptance shall be manifested by notification, except where it may be manifested
by conduct in accordance with the relevant usage or as indicated in the offer.
Article 23 Timely Dispatch of Acceptance
An acceptance shall reach the offeror within the period prescribed in the offer.
Where the offer does not prescribe a period for acceptance, the acceptance shall
reach the offeror as follows:
(i) Where the offer is made orally, the acceptance shall
be dispatched immediately, unless otherwise agreed by the parties;
(ii) Where the offer is made in a non-oral manner, the acceptance
shall reach the offeror within a reasonable time.
Article 24 Commencement of the Period for Acceptance
Where an offer is made by a letter or a telegram, the period for acceptance
commences on the date shown on the letter or the date on which the telegram
is handed in for dispatch. If the letter does not specify a date, the period
commences on the posting date stamped on the envelop. Where the offer is made
through an instantaneous communication device such as telephone or facsimile,
etc., the period for acceptance commences once the offer reaches the offeree.
Article 25 Contract Formed upon Effectiveness
of Acceptance
A contract is formed once the acceptance becomes effective.
Article 26 Effectiveness of Acceptance
A notice of acceptance becomes effective once it reaches the offeror. Where
the acceptance does not require notification, it becomes effective once an act
of acceptance is performed in accordance with the relevant usage or as required
by the offer.
Where a contract is concluded by the exchange of electronic messages, the time
of arrival of the acceptance shall be governed by Paragraph 2 of Article 16
hereof.
Article 27 Withdrawal of Acceptance
An acceptance may be withdrawn. The notice of withdrawal shall reach the offeror
before or at the same time as the acceptance.
Article 28 Late Acceptance
An acceptance dispatched by the offeree after expiration of the period for acceptance
constitutes a new offer, unless the offeror timely advises the offeree that
the acceptance is valid.
Article 29 Delayed Transmission of Acceptance
If the offeree dispatched its acceptance within the period for acceptance, and
the acceptance, which would otherwise have reached the offeror in due time under
normal circumstances, reaches the offeror after expiration of the period for
acceptance due to any other reason, the acceptance is valid, unless the offeror
timely advises the offeree that the acceptance has been rejected on grounds
of the delay.
Article 30 Acceptance Containing Material Change
The terms of the acceptance shall be identical to those of the offer. A purported
acceptance dispatched by the offeree which materially alters the terms of the
offer constitutes a new offer. A change in the subject matter, quantity, quality,
price or remuneration, time, place and method of performance, liabilities for
breach of contract or method of dispute resolution is a material change to the
terms of the offer.
Article 31 Acceptance Containing Non-material
Changes
An acceptance containing nonmaterial changes to the terms of the offer is nevertheless
valid and the terms thereof prevail as the terms of the contract, unless the
offeror timely objects to such changes or the offer indicated that acceptance
may not contain any change to the terms thereof.
Article 32 Time of Formation in Case of Memorandum
of Contract
Where the parties enter into a contract by a memorandum of contract, the contract
is formed when it is signed or sealed by the parties.
Article 33 Time of Formation in Case of Letters
or Electronic Messages; Confirmation Letter
Where the parties enter into a contract by the exchange of letters or electronic
messages, one party may require execution of a confirmation letter before the
contract is formed. The contract is formed upon execution of the confirmation
letter.
Article 34 Place of Formation; Electronic Messages
The place where the acceptance becomes effective is the place of formation of
a contract.
Where a contract is concluded by the exchange of electronic messages, the recipient's
main place of business is the place of formation of the contract; if the recipient
does not have a main place of business, its habitual residence is the place
of formation of the contract. If the parties have agreed otherwise, such agreement
prevails.
Article 35 Place of Formation in Case of Memorandum
of Contract
Where a contract is concluded by a memorandum of contract, its place of formation
is the place where the parties sign or seal the contract.
Article 36 Effect of Failure to Conclude Contract
in Writing
Where a contract is to be concluded by a writing as required by the relevant
law or administrative regulation or as agreed by the parties, if the parties
failed to conclude the contract in writing but one party has performed its main
obligation and the other party has accepted the performance, the contract is
formed.
Article 37 Effect of Failure to Sign in Case
of Memorandum of Contract
Where a contract is to be concluded by a memorandum of contract, if prior to
signing or sealing of the contract, one party has performed its main obligation
and the other party has accepted the performance, the contract is formed.
Article 38 Contract under State Mandatory Plan
Where the state has, in light of its requirements, issued a mandatory plan or
state purchase order, the relevant legal persons and other organizations shall
enter into a contract based on the rights and obligations of the parties prescribed
by the relevant laws and administrative regulations.
Article 39 Standard Terms; Duty to Call Attention
Where a contract is concluded by way of standard terms, the party supplying
the standard terms shall abide by the principle of fairness in prescribing the
rights and obligations of the parties and shall, in a reasonable manner, call
the other party's attention to the provision(s) whereby such party's liabilities
are excluded or limited, and shall explain such provision(s) upon request by
the other party.
Standard terms are contract provisions which were prepared in advance by a party
for repeated use, and which are not negotiated with the other party in the course
of concluding the contract.
Article 40 Invalidity of Certain Standard Terms
A standard term is invalid if it falls into any of the circumstances set forth
in Article 52 and Article 53 hereof, or if it excludes the liabilities of the
party supplying such term, increases the liabilities of the other party, or
deprives the other party of any of its material rights.
Article 41 Dispute Concerning Construction of
Standard Term
In case of any dispute concerning the construction of a standard term, such
term shall be interpreted in accordance with common sense. If the standard term
is subject to two or more interpretations, it shall be interpreted against the
party supplying it. If a discrepancy exists between the standard term and a
non-standard term, the non-standard term prevails.
Article 42 Pre-contract Liabilities
Where in the course of concluding a contract, a party engaged in any of the
following conducts, thereby causing loss to the other party, it shall be liable
for damages:
(i) negotiating in bad faith under the pretext of concluding
a contract;
(ii) intentionally concealing a material fact relating to
the conclusion of the contract or supplying false information;
(iii) any other conduct which violates the principle of good faith.
Article 43 Trade Secrets; Liability for Disclosure
or Improper Use
A party may not disclose or improperly use any trade secret which it became
aware of in the course of negotiating a contract, regardless of whether a contract
is formed. If the party disclosed or improperly used such trade secret, thereby
causing loss to the other party, it shall be liable for damages.
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