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CONTRACT LAW OF P. R. CHINA 4
Sources:International Trade Law, Time:2017-03-06 15:52, Click:, Comment
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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.
Chapter Ten: Contracts for Supply of Power, Water, Gas , Or Heat
Article 176 Definition of Power Supply Contract
A power supply contract is a contract whereby the power supplier supplies power to the power customer, who pays the electricity charge.
Article 177 Terms of Power Supply Contract
A power supply contract includes terms such as the method, quality, and time of power supply, and the capacity, location and nature of power use, and the metering method, electricity rate, the method of settlement of electricity charge, and the responsibility for maintenance of the power supply and power use facilities, etc.
Article 178 Place of Performance of Power Supply Contract
The place of performance of a power supply contract shall be the place prescribed by the parties, and if not prescribed or clearly prescribed, the place of performance shall be the boundary where ownership of the power supply facilities is divided.
Article 179 Obligations of Power Supplier
The power supplier shall supply power in a safe manner in accordance with the power supply quality standard mandated by the state and in accordance with the contract. Where the power supplier failed to supply power in a safe manner in accordance with the power supply quality standard mandated by the state and in accordance with the contract, thereby causing loss to the power customer, it shall be liable for damages.
Article 180 Obligation to Notify in Case of Scheduled Suspension
Where the power supplier needs to suspend power supply due to reasons such as periodical maintenance or provisional maintenance of the power supply facilities, legally required power rationing, or illegal use of power by the power customer, etc., it shall notify the power customer in advance in accordance with the relevant stipulations of the state. Where the power supplier suspended power supply without notifying the power customer in advance, thereby causing loss to the power customer, it shall be liable for damages.
Article 181 Obligation to Make Emergency Repair in Case of Power Outage
Where a power outage is caused by reasons such as natural disasters, etc., the power supplier shall timely make emergency repair in accordance with the relevant stipulations of the state. Where the power supplier failed to timely make emergency repair, thereby causing loss to the power customer, it shall be liable for damages.
Article 182 Payment of Electricity Charge
The power customer shall timely pay the electricity charge in accordance with the relevant stipulations of the state and in accordance with the contract. Where the power customer delayed in paying the electricity charge, it shall pay liquidated damages in accordance with the contract. Where the power customer failed to pay the electricity charge and liquidated damages within a reasonable time after receiving demand for payment, the power supplier may shut off the power supply in accordance with the procedure prescribed by the state.
Article 183 Power Customer‘s Obligation of Proper Use
The power customer shall use power in a safe manner in accordance with the relevant stipulations of the state and in accordance with the contract. Where the power customer failed to use power in a safe manner in accordance with the relevant stipulations of the state and in accordance with the contract, thereby causing loss to the power supplier, it shall be liable for damages.
Article 184 Applicability to Contract for Supply of Water, Gas or Heat
A contract for the supply of water, gas or heat shall be governed by reference to the relevant provisions governing power supply contracts.
Chapter Eleven: Gift Contracts
Article 185 Definition of Gift Contract
A gift contract is a contract whereby the donor conveys his property to the donee without reward and the donee manifests his acceptance of the gift.
Article 186 Revocation Prior to Transfer of Rights; Exception
Prior to the transfer of rights to the gift property, the donor may revoke the gift.
The previous paragraph does not apply to any gift contract the nature of which serves public interests or fulfills a moral obligation, such as disaster relief, poverty relief, etc., or any gift contract which has been notarized.
Article 187 Observance of Conveyance Procedure
Where conveyance of the gift property is subject to any procedure such as registration, etc. under the law, the relevant procedure shall be carried out.
Article 188 Donee‘s Right to Require Delivery in Certain Cases
In the case of a gift contract the nature of which serves public interests or fulfills a moral obligation, such as disaster relief, poverty relief, etc., or a gift contract which has been notarized, if the donor fails to deliver the gift property, the donee may require delivery.
Article 189 Liability of Donor for Misconduct or Gross Negligence
Where the gift property is damaged or lost due to any intentional misconduct or gross negligence of the donor, he shall be liable for damages.
Article 190 Gift May Be Subject to Obligations
A gift may be subject to obligations.
Where the gift is subject to obligations, the donee shall perform his obligations in accordance with the contract.
Article 191 Donor Not Liable for Defect; Exceptions
The donor is not liable for any defect in the gift property. Where the gift is subject to obligations, and the gift property is defective, the donor has the same warranty obligations as a seller to the extent of the prescribed obligations.
Where the donor intentionally omitted to inform the donee of the defect or warranted the absence of any defect, thereby causing loss to the donee, he shall be liable for damages.
Article 192 Circumstances Giving Rise to Revocation Right
Where the donee is in any of the following circumstances, the donor may revoke the gift:
(i) seriously harming the donor or any immediate family member thereof;
(ii) failing to perform support obligations owed to the donor;
(iii) failing to perform the obligations under the gift contract.
The donor shall exercise his revocation right within one year after he became, or should have become, aware of the cause for revocation.
Article 193 Exercise of Revocation Right by Heir
Where the donor is deceased or incapacitated due to the donee‘s illegal act, his heir or legal agent may revoke the gift.
The heir or legal agent of the donor shall exercise the right of revocation within six months after he became, or should have become, aware of the cause for revocation.

CONTRACT LAW OF P. R. CHINA 5

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