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(Adopted and Promulgated by the Second Session of the Ninth National People's
Article 130 Definition of Sales Contract
A sales contract is a contract whereby the seller transfers title to the subject
matter to the buyer, who pays the price.
Article 131 Additional Terms
In addition to the terms set forth in Article 12 hereof, a sales contract may
include terms such as packing method, inspection standard and inspection method,
method of settlement of account, and the language versions of the contract and
the authenticity thereof, etc.
Article 132 Title or Disposal Power; Prohibition of
or Restriction on Transfer
The seller shall have title to, or the power to dispose of, the subject matter
for sale.
Where a law or administrative regulation prohibits or restricts the transfer
of the subject matter, such provision applies.
Article 133 Passing of Title
Title to the subject matter passes at the time of its delivery, except otherwise
provided by law or agreed by the parties.
Article 134 Conditional Sale
The parties may prescribe in the sales contract that title to the subject matter
remain in the seller until the buyer has paid the price or has performed other
obligations.
Article 135 Seller's Obligations with Respect to Title
Transfer
The seller shall perform the obligations of delivering to the buyer the subject
matter or the document for taking delivery thereof, as well as transferring
title to the subject matter.
Article 136 Delivery of Related Materials by Seller
In addition to the document for taking delivery, the seller shall deliver to
the buyer documents and materials related to the subject matter in accordance
with the contract or in accordance with the relevant usage.
Article 137 Sales Involving Intellectual Property
In a sale of any subject matter which contains intellectual property such as
computer software, etc., the intellectual property in the subject matter does
not vest in the buyer, except otherwise provided by law or agreed by the parties.
Article 138 Time of Delivery
The seller shall deliver the subject matter at the prescribed time. Where the
contract prescribes a period during which delivery is to take place, the seller
may deliver at any time during the delivery period.
Article 139 Absence of Provision for Time of Delivery
Where the time for delivery of the subject matter was not prescribed or clearly
prescribed, Article 61 and Item 4 of Article 62 apply.
Article 140 Time of Delivery of Subject Matter Already
in Buyer's Possession
Where the subject matter was in buyer's possession prior to conclusion of the
contract, the time when the contract becomes effective is the time of delivery.
Article 141 Absence of Provision for Place of Delivery
The seller shall deliver the subject matter at the prescribed place.
Where the place of delivery was not prescribed or clearly prescribed, and cannot
be determined in accordance with Article 61 hereof, the following provisions
apply:
(i) If the subject matter needs carriage, the seller
shall deliver the subject matter to the first carrier for transmission to the
buyer;
(ii) Where the subject matter does not need carriage, if at
the time of conclusion of the contract, the buyer and the seller knew the subject
matter was at a particular place, the seller shall deliver the subject matter
at such place; and if they did not know the location of the subject matter,
delivery shall take place at the seller's place of business at the time of conclusion
of the contract.
Article 142 Passing of Risk
The risk of damage to or loss of the subject matter is borne by the seller prior
to delivery, and by the buyer after delivery, except otherwise provided by law
or agreed by the parties.
Article 143 Risk Allocation in Case of Delayed Delivery
Where the subject matter was not delivered at the prescribed time due to any
reason attributable to the buyer, the buyer shall bear the risk of damage to
or loss of the subject matter as from the date of breach.
Article 144 Risk Allocation for Subject Matter in Transit
Where the seller sells the subject matter which has been delivered to a carrier
for transportation and is in transit, unless otherwise agreed by the parties,
the risk of damage or loss is borne by the buyer as from the time of formation
of the contract.
Article 145 Passing of Risk in Case of Seller Arranged
Carriage
Where the place of delivery was not prescribed or clearly prescribed, if the
subject matter needs carriage as provided in Item (i) of Paragraph 2 of Article
141, the risk of damage to or loss of the subject matter is borne by the buyer
as from the time the seller delivers the subject matter to the first carrier.
Article 146 Risk Allocation in Case of Delay in Taking
Delivery
Where the seller placed the subject matter at the place of delivery in accordance
with the contract or in accordance with Item (ii) of Paragraph 2 of Article
141 hereof and the buyer fails to take delivery in breach of the contract, the
risk of damage to or loss of the subject matter is borne by the buyer as from
the date of breach.
Article 147 Passing of Risk Notwithstanding Failure
to Deliver Documents
Failure by the seller to deliver the documents and materials relating to the
subject matter in accordance with the contract does not affect passing of the
risk of damage to or loss of the subject matter.
Article 148 Rejection on Grounds of Quality Non-compliance;
Risk Allocation in Case of Rejection
Where the purpose of the contract is frustrated due to failure of the subject
matter to meet the quality requirements, the buyer may reject the subject matter
or terminate the contract. If the buyer rejects the subject matter or terminates
the contract, the risk of damage to or loss of the subject matter is borne by
the seller.
Article 149 Right to Remedy Notwithstanding Assumption
of Risk
Buyer's assumption of the risk of damage to or loss of the subject matter does
not prejudice its right to hold the seller liable for breach of contract if
the seller rendered non-conforming performance.
Article 150 Third Party Claim Warranty
The seller is obligated to warrant that the buyer will be free from any third
party claim against it in respect of the subject matter delivered, except otherwise
provided by law.
Article 151 Buyer's Knowledge Releasing Third Party
Claim Warranty
Where the buyer knew or should have known that the subject matter was subject
to a third party claim at the time of conclusion of the contract, the seller
does not assume the obligation prescribed in Article 150 hereof.
Article 152 Right to Withhold Payment in Case of Third
Party Claim
Where the buyer has conclusive evidence establishing that a third person may
make a claim on the subject matter, it may withhold payment of the corresponding
price, except where the seller has provided appropriate assurance.
Article 153 Quality Specifications
The seller shall deliver the subject matter in compliance with the prescribed
quality requirements. Where the seller gave quality specifications for the subject
matter, the subject matter delivered shall comply with the quality requirements
set forth therein.
Article 154 Absence of Prescribed Quality Requirements
Where the quality requirements for the subject matter were not prescribed or
clearly prescribed, and cannot be determined in accordance with Article 61 hereof,
Item (i) of Article 62 hereof applies.
Article 155 Quality Non-compliance Giving Rise to Claims
If the subject matter delivered by the seller fails to comply with the quality
requirements, the buyer may hold the seller liable for breach of contract in
accordance with Article 111 hereof.
Article 156 Packing Method
The seller shall deliver the subject matter packed in the prescribed manner.
Where a packing method was not prescribed or clearly prescribed, and cannot
be determined in accordance with Article 61 hereof, the subject matter shall
be packed in a customary manner, or, if there is no customary manner, in a manner
adequate to protect the subject matter.
Article 157 Inspection upon Receipt of Subject Matter
Upon receipt of the subject matter, the buyer shall inspect it within the prescribed
inspection period. Where no inspection period was prescribed, the buyer shall
timely inspect the subject matter.
Article 158 Consequence of Failure to Inspect; Exceptions
Where an inspection period was prescribed, the buyer shall notify the seller
of any non-compliance in quantity or quality of the subject matter within such
inspection period. Where the buyer delayed in notifying the seller, the quantity
or quality of the subject matter is deemed to comply with the contract.
Where no inspection period was prescribed, the buyer shall notify the seller
within a reasonable period, commencing on the date when the buyer discovered
or should have discovered the quantity or quality non-compliance. If the buyer
fails to notify within a reasonable period or fails to notify within 2 years,
commencing on the date when it received the subject matter, the quantity or
quality of the subject matter is deemed to comply with the contract, except
that if there is a warranty period in respect of the subject matter, the warranty
period applies and supersedes such two year period.
Where the seller knew or should have known the non-compliance of the subject
matter, the buyer is not subject to the time limits for notification prescribed
in the previous two paragraphs.
Article 159 Absence of Price Provision
The buyer shall pay the price in the prescribed amount. Where the price was
not prescribed or clearly prescribed, the provisions of Article 61 and Item
(ii) of Article 62 apply.
Article 160 Place of Payment
The buyer shall pay the price at the prescribed place. Where the place of payment
was not prescribed or clearly prescribed, and cannot be determined in accordance
with Article 61 hereof, the buyer shall make payment at the seller's place of
business, provided that if the parties agreed that payment shall be conditional
upon delivery of the subject matter or the document for taking delivery thereof,
payment shall be made at the place where the subject matter, or the document
for taking delivery thereof, is delivered.
Article 161 Time of Payment
The buyer shall pay the price at the prescribed time. Where the time for payment
was not prescribed or clearly prescribed, and cannot be determined in accordance
with Article 61 hereof, the buyer shall make payment at the same time it receives
the subject matter or the document for taking delivery thereof.
Article 162 Buyer's Option in Case Delivered Quantity
Exceeds Prescribed Amount
Where the seller delivered the subject matter in a quantity greater than that
prescribed in the contract, the buyer may accept or reject the excess quantity.
Where the buyer accepts the excess quantity, it shall pay the price based on
the contract rate; where the buyer rejects the excess quantity, it shall timely
notify the seller.
Article 163 Title to Fruits Before and After Delivery
The fruits of the subject matter belong to the seller if accrued before delivery,
and to the buyer if accrued after delivery.
Article 164 Effect of Termination on Grounds of Non-compliance
of Main or Ancillary Components
Where a contract is terminated due to non-compliance of any main component of
the subject matter, the effect of termination extends to the ancillary components.
Where the contract is terminated due to non-compliance of any ancillary component
of the subject matter, the effect of termination does not extend to the main
components.
Article 165 Termination in Part or in Whole
Where the subject matter comprises of a number of components, one of which does
not comply with the contract, the buyer may terminate the portion of the contract
in respect of such component, provided that if severance of such component with
the other components will significantly diminish the value of the subject matter,
the party may terminate the contract in respect of such number of components.
Article 166 Effect of Termination in Case of Delivery
in Installments
Where the seller is to deliver the subject matter in installments, if the seller's
failure to deliver or non-conforming delivery of one installment frustrates
the purpose of the contract in respect of such installment, the buyer may terminate
the portion of the contract in respect thereof.
If the seller's failure to deliver or non-conforming delivery of one installment
frustrates the purpose of the contract in respect of all subsequent installments
notwithstanding their delivery, the buyer may terminate the portion of the contract
in respect of such installment as well as any subsequent installment.
If the buyer is to terminate the portion of the contract in respect of a particular
installment which is interdependent with all other installments, it may terminate
the contract in respect of all delivered and undelivered installments.
Article 167 Termination in Case of Sale by Installment
Payment
In a sale by installment payment, where the buyer failed to make payments as
they became due, if the delinquent amount has reached one fifth of the total
price, the seller may require payment of the full price from the buyer or terminate
the contract. If the seller terminates the contract, it may require the buyer
to pay a fee for its use of the subject matter.
Article 168 Quality Provisions in Case of Sale by Sample
In a sale by sample, the parties shall place the sample under seal, and may
specify the quality of the sample. The subject matter delivered by the seller
shall comply with the sample as well as the quality specifications.
Article 169 Latent Defect in Sample
In a sale by sample, if the buyer was not aware of a latent defect in the sample,
the subject matter delivered by the seller shall nevertheless comply with the
normal quality standard for a like item, even though the subject matter delivered
complies with the sample.
Article 170 Sale by Trial
In a sale by trial, the parties may prescribe the trial period. Where a trial
period was not prescribed or clearly prescribed, and cannot be determined in
accordance with Article 61 hereof, it shall be determined by the seller.
Article 171 Purchase or Rejection During Trial Period
In a sale by trial, the buyer may either purchase or reject the subject matter
during the trial period. At the end of the trial period, the buyer is deemed
to have made the purchase if it fails to manifest its intention to purchase
or reject the subject matter.
Article 172 Sale by Tender Governed by Relevant Laws
In a sale by tender, matters such as the rights and obligations of the parties
and the tendering procedure, etc. are governed by the relevant laws and administrative
regulations.
Article 173 Sale by Auction Governed by Relevant Laws
In a sale by auction, matters such as the rights and obligations of the parties
and the auctioning procedure, etc. are governed by the relevant laws and administrative
regulations.
Article 174 General Applicability to Contracts for
Value
For any other contract for value, if the law provides for such contract, such
provisions apply; absent any such provision, reference shall be made to the
relevant provisions governing sales contracts.
Article 175 Applicability to Barter Transaction
Where the parties agree on a barter transaction involving transfer of title
to the subject matters, such transaction shall be governed by reference to the
relevant provisions governing sales contracts
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