Law of the People's Republic of China on Foreign-related Economic Contracts

Law of the People's Republic of China on Foreign-related Economic Contracts

Order of the President No.22

March 21, 1985

(Adopted at the Tenth Session of the Standing Committee of the
Sixth National People's Congress, promulgated by Order No. 22 of the
President of the People's Republic of China on March 21, 1985, and
effective as of July 1, 1985)

Contents
Chapter I General Provisions
Chapter II The Conclusion of Contracts
Chapter III The Performance of Contracts and Liability for Breach of Contract
Chapter IV The Assignment of Contracts
Chapter V The Modification, Rescission and Termination of Contracts
Chapter VI The Settlement of Disputes
Chapter VII Supplementary Provisions

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.

Chapter II The Conclusion of Contracts
　
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.
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