Conclusion of Economic Contracts

Date Nov 10 2011 15:00:31
Nov.10,2011(SHMET)--Article 7 A contract shall be formed as soon as the parties to it have reached a written agreement on the terms and have signed the contract. If an agreement is reached by means of letters, telegrams or telex and one party requests a signed letter of confirmation, the contract shall be formed only after the letter of confirmation is signed.
Contracts which are subject to the approval of the state, as provided for by the laws or administrative regulations of the People's Republic of China, shall be formed only after such approval is granted.
 Article 8 Appendices specified in a contract shall be integral parts of the contract.
 Article 9 Contracts that violate the law or the public interest of the People's Republic of China shall be void.
In case any terms in a contract violate the law or the public interest of the People's Republic of China, the validity of the contract shall not be affected if such terms are cancelled or modified by the parties through consultations.
 Article 10 Contracts that are concluded by means of fraud or duress shall be void.
 Article 11 A party which is responsible for the invalidity of a contract shall be liable for the losses suffered by the other party as a result of the contracts becoming invalid.
 Article 12 A contract shall, in general, contain the following terms:
 (1) the corporate or personal names of the contracting parties and their nationalities and principal places of business or domicile;
 (2) the date and place of the signing of the contract;
 (3) the type of contract and the kind and scope of the object of the contract;
 (4) The technical conditions, quality, standard, specifications and quantity of the object of the contract;
 (5) the time limit, place and method of performance;
 (6) the price, amount and method of payment, and various incidental charges;
 (7) whether the contract is assignable and, if it is, the conditions for its assignment;
 (8) liability to pay compensation and other liabilities for breach of contract;
 (9) the ways for settling contract disputes; and
 (10) the language(s) in which the contract is to be written and its validity.
 Article 13 So far as it may require, a contract shall provide for the limits of the risks to be borne by the parties in performing the object; if necessary, it shall provide for the coverage of insurance for the object.
 Article 14 Where a contract needs to be performed continuously over a long period, the parties shall set a period of validity for the contract and may also stipulate conditions for its extension and its termination before its expiry.
 Article 15 In the contract the parties may agree to provide a guaranty. The guarantor shall be held liable within the agreed scope of guaranty.
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Law of the People's Republic of China on Foreign-related Economic Contracts

Date Nov 10 2011 14:59:20

Chapter I General Provisions
 Article 1 This Law is formulated with a view to protecting the lawful rights and interests of the parties to Chinese-foreign economic contracts and promoting the development of China's foreign economic relations.
 Article 2 This Law shall apply to economic contracts concluded between enterprises or other economic organizations of the People's Republic of China and foreign enterprises, other economic organizations or individuals. (hereinafter referred to as "contracts"). However, this provision shall not apply to international transport contracts.
 Article 3 Contracts shall be concluded according to the principle of equality and mutual benefit and the principle of achieving agreement through consultation.
 Article 4 In concluding a contract, the parties must abide by the law of the People's Republic of China and shall not harm the public interest of the People's Republic of China.
 Article 5 The parties to a contract may choose the proper law applicable to the settlement of contract disputes. In the absence of such a choice by the parties, the law of the country which has the closest connection with the contract shall apply.
The law of the People's Republic of China shall apply to contracts that are to be performed within the territory of the People's Republic of China, namely contracts for Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures and Chinese-foreign cooperative exploration and development of natural resources.
For matters that are not covered in the law of the People's Republic of China, international practice shall be followed.
 Article 6 Where an international treaty which is relevant to a contract, and to which the People's Republic of China is a contracting party or a signatory, has provided differently from the law of the People's Republic of China, the provisions of the international treaty shall prevail, with the exception of those clauses on which the People's Republic of China has declared reservation.

Report by SHMET

Taming policies urged not to loosen

Date Nov 09 2011 15:33:20
Nov.09,2011(SHMET)--BEIJING-- The recent protests staged by homeowners in some cities against price cuts have aroused people's concern about whether the government should readjust its policies on the housing market. Analysts urge that the taming policies should not loosen under such circumstances. 

Last week, hundreds of homeowners flocked to the sales office of a property project developed by the Longfor Company in Shanghai to seek refunds or purchase cancellations after big discounts were offered by developers to boost sales.

Similar episodes have been reported in the cities of Beijing and Hangzhou, where housing developers, pressed by a financial crunch and a sales slump, have been forced to spur sales by cutting housing prices.

"If the property developers have to compensate the home buyers after the price drops, should they ask for more profits when the prices go up? In the home sales transaction, it is necessary to abide by contract clauses," People's Daily, the country's leading newspaper, commented Friday.

Even so, it is unfair to blame the home buyers only since they bear enormous pressures and risks under the current housing market with high prices and unreasonable pre-sales regime, but they will never work things out by demanding their money back or even using violence, the paper continued to say.

While the government should shoulder more responsibilities to supervise the housing market, it is not an option to just halt price drops when complaints appear. Since the housing market control has entered a key phase, halting price cuts might lead to a total failure of the government’s previous efforts, it stated.

A report published by China Securities Journal the same day said the recent incidents are disturbing the thorough implementation of the taming policies concerning the housing market. Housing prices might rebound and bring hidden trouble for China’s economic development if the government pursues a halt of price drops now.

China's government has been pursuing a series of policies to curb the runaway housing market, including purchase limits, higher down payments, the introduction of a property tax in some cities and construction of housing projects for low-income people.

The policies have been gradually taking effect, with the turning point of the housing prices looming amid steep discounts.

Official statistics showed that only 1,039 housing units were sold in Beijing during the National Day holiday, including 908 new homes and 131 second-hand ones, down 22.8 percent over the same period last year.

Shanghai also saw a significant slump in home sales during the holiday. Daily housing sales in the city stood at about 100 units, while in the major cities of Guangzhou and Hangzhou, sales figures remained at only two digits.

According to the report, some insiders doubted that the protests staged recently might be a trick of the property developers to force the government to loosen its policies.

The central government has made a clear attitude on maintaining the taming policies, the report said.

Premier Wen Jiabao urged governments at all levels to consolidate the achievements of the taming measures as the housing market control and construction of the affordable housings have entered a key phrase, during an inspection tour to Nanning City in south China's Guangxi Zhuang Autonomous Region last week.

Price drops in the housing market hurt the investors the most, the property developers and the local government relying on land profits, instead of the common people. Only the taming policies are kept consistent, can the property market develop healthily and steadily in the future, the report said.

Report by SHMET

Wrangle over auto warranty regulation

Date Nov 09 2011 15:32:32

BEIJING - The final version of an auto warranty regulation could require that an independent third-party agency will decide disputes between consumers and car dealers. 

A mechanism for warranty dispute resolution was the most-discussed topic at the first public hearing on a draft of the new law, which was first released in September. 

Some 16 representatives participated the Oct 26 hearing - eight for consumers and the rest from carmakers including Beijing Hyundai, Toyota, Great Wall and Dongfeng, as well as auto repair companies and dealerships. 

Following the hearing, the General Administration of Quality Supervision, Inspection and Quarantine said it will "take time to revise the draft" after considering suggestions and will release a final law "as soon as possible." 

The watchdog is also continuing research and evaluating related standards, said Liu Zhaobin, director of the administration's law and regulation department. 

Authority needed 

Representatives of both consumers and auto companies said a third-party dispute resolution agency would be needed. 

"An authoritative third-party agency should be established so dealerships cannot refuse to carry out their responsibilities," said one consumer advocate. 

Customer representative Wang Jian was quoted in local media saying the qualified agency should be approved and announced publicly. 

Long Wujun from Beijing Hyundai also supported the third-party proposal, noting it would save time and energy for both customers and dealers. 

The draft regulation contains stringent guidelines that would require carmakers to offer warranties of least two years or 40,000 km for vehicles, and three years or 60,000 km on vehicle powertrain and steering systems. 

But the most contentitious clause would permit customers to return a vehicle free of charge if serious safety problems due to quality defects arise within 30 days of purchase. 

In addition, customers can return vehicles that are not safe or seriously flawed if two repairs fail to solve the problem, according to the draft. 

An automotive website survey showed that 47 percent of respondents support the regulation, while 29 percent voiced a negative perception. The rest had no clear view. 

Another auto survey found that almost 12 percent of respondents were concerned about how compliance will be fairly evaluated. 

Dealerships voiced worries over monetary losses if a large number of customers ask to return or exchange cars. 

Before the public hearing began, Dong Yang, chief of the China Association of Automobile Manufacturers, said it is not the right time to implement the regulation. 

If the law is put in force too quickly, consumer rights may not be properly protected, he said. 

Statistics from the China Consumer Association showed that there were 4,069 formal auto complaints in the third quarter of this year, up 14.7 percent from the same period in 2010. 

Report by SHMET

Harsher punishment for leaking personal information

Date Nov 09 2011 15:31:54

BEIJING - China may impose economic and civil punishments, in addition to criminal penalties, on those found guilty of leaking citizens' personal information, according to a draft amendment that will be voted on by China's top legislature Saturday.

Individuals, government personnel and the working staff of institutions such as banks, hospitals and telecommunication offices will be fined for leaking personal information, states a draft to be submitted to the Standing Committee of the National People's Congress (NPC) for approval.

Civil penalties or compensation may be applied if the offenses are damaging to those whose information is leaked, according to the draft amendment.

According to a previous version reviewed by the NPC Standing Committee on Monday, offenders will be fined only in the case of illegal gains.

The earlier draft also stipulates that those who leak personal information will face criminal prosecution or detention, but without giving civil penalties to the offenders.

The NPC Standing Committee began its bimonthly session on Monday and will conclude it on Saturday.

Report by SHMET