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CONTRACT LAW OF P. R. CHINA 5
Sources:International Trade Law, Time:2017-03-06 15:53, Click:, Comment
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Article 194 Remedies in Case of Revocation
Upon revocation of the gift, the person with the revocation right may claim restitution of the gift property from the donee.
Article 195 Economic Hardship Releases Gift Obligation
If the donor‘s economic situation has deteriorated significantly, thereby seriously impacting on his business operation or family life, he may be released from the gift obligations.
Chapter Twelve: Contracts for Loan of Money
Article 196 Definition of Contract for Loan of Money
A contract for loan of money is a contract whereby the borrower borrows a sum of money from the lender, and returns the sum borrowed and pays interest thereon at the prescribed time.
Article 197 Writing Requirement; Terms
A contract for loan of money shall be in writing, except where the loan is between natural persons who have agreed otherwise.
A contract for loan of money includes terms such as the loan‘s type, currency, purpose, amount, interest rate, term and method of repayment, etc.
Article 198 Assurance by Borrower
In entering into a contract for loan of money, the lender may require the borrower to provide assurance. Such assurance shall be arranged in accordance with the Security Law of the People‘s Republic of China.
Article 199 Borrower‘s Disclosure Obligation
In entering into a contract for loan of money, the borrower shall provide true information concerning its business operation and financial condition in connection with the loan as required by the lender.
Article 200 Deduction of Interest in Advance Prohibited
No interest shall be deducted from the principal in advance. Where any interest amount is deducted from the principal in advance, the repayment of principal and calculation of interest shall be based on the actual amount borrowed.
Article 201 Remedies in Case of Failure to Make Loan Amount Available Or Failure to Draw Down
Where the lender failed to make the loan amount available on the prescribed date and in the prescribed amount, thereby causing loss to the borrower, it shall pay damages.
Where the borrower failed to draw down on the prescribed date and in the prescribed amount, it shall nevertheless pay the interest on the prescribed date and in the prescribed amount.
Article 202 Lender Entitled to Monitor Use of Proceeds
The lender may examine and monitor the application of the proceeds in accordance with the contract. The borrower shall periodically provide the lender with materials such as related financial and accounting reports, etc. in accordance with the contract.
Article 203 Lender‘s Remedies in Case of Borrower‘s Misuse of Proceeds
Where the borrower fails to use the proceeds for the prescribed purpose, the lender may withhold funding, call the loan, or terminate the contract.
Article 204 Minimum and Maximum Interest Rates
The interest rate on the loan provided by a financial institution engaged in lending operation shall be prescribed between the minimum and maximum rates mandated by the People‘s Bank of China.
Article 205 Time of Interest Payment
The borrower shall pay the interest at the prescribed time. Where the time of interest payment was not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, if the loan term is less than one year, the interest shall be paid together with the principal at the time of repayment; if the loan term is one year or longer, the interest shall be paid at the end of each annual period, and where the remaining period is less than one year, the interest shall be paid together with the principal at the time of repayment.
Article 206 Time of Principal Repayment
The borrower shall repay the principal at the prescribed time. Where the time of repayment was not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, the borrower may repay at any time; and the lender may demand repayment from the borrower within a reasonable time.
Article 207 Delayed Repayment Interest
Where the borrower failed to repay the loan at the prescribed time, it shall pay delayed repayment interest in accordance with the contract or the relevant stipulations of the state.
Article 208 Calculation of Interest in Case of Prepayment
Where the borrower prepays the loan, unless otherwise agreed by the parties, the interest shall be calculated based on the actual period of loan.
Article 209 Extension of Loan Term
The borrower may apply to the lender for extension of the loan term before its maturity. Upon consent by the lender, the loan term may be extended.
Article 210 Time of Effectiveness of Loan Contract between Natural Persons
A contract for loan of money between natural persons becomes effective at the time the lender makes the loan amount available.
Article 211 Interest under Loan Contract between Natural Persons
Under a contract for loan of money between natural persons, if payment of interest was not prescribed or clearly prescribed, the loan is deemed interest free.
Under a contract for loan of money between natural persons, the interest rate on the loan may not contravene the relevant stipulations of the state regarding limit on loan interest rate.
Chapter Thirteen: Leasing Contracts
Article 212 Definition of Leasing Contract
A leasing contract is a contract whereby the lessor delivers to the lessee the lease item for it to use or accrue benefit from, and the lessee pays the rent.
Article 213 Terms of Leasing Contract
A leasing contract includes terms such as the name, quantity and purpose of the lease item, lease term, amount of rent, time and method of rent payment, as well as maintenance and repair of the lease item, etc.
Article 214 Limit on Lease Term; Renewal
The lease term may not exceed twenty years. If the lease term exceeds twenty years, the portion of the lease term beyond the initial twenty year period is invalid.
At the end of the lease term, the parties may renew the lease, provided that the renewed term may not exceed twenty years commencing on the date of renewal.
Article 215 Writing Requirement in Case Lease Term Is Six Months or Longer
Where the lease term is six months or longer, the lease shall be in writing. If the parties fail to adopt a writing, the lease is deemed a non-term lease.
Article 216 Lessor‘s Obligation to Deliver Lease Item
The lessor shall deliver the lease item to the lessee in accordance with the contract and shall, during the lease term, keep the lease item fit for the prescribed purpose.
Article 217 Manner of Using Lease Item
The lessee shall use the lease item in the prescribed manner. Where the manner of use of the lease item was not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, the lease item shall be used in a manner consistent with its nature.
Article 218 Lessee Not Liable for Wear and Tear
Where the lessee used the lease item in the prescribed manner or in a manner consistent with its nature, thereby causing wear and tear to the lease item, it is not liable for damages.
Article 219 Lessor Entitled to Terminate in Case of Unauthorized Use
Where the lessee failed to use the lease item in the prescribed manner or in a manner consistent with its nature, thereby causing damage to it, the lessor may terminate the contract and claim damages.
Article 220 Lessor‘s Maintenance Obligations
The lessor shall perform the obligations of maintenance and repair of the lease item, except otherwise agreed by the parties.
Article 221 Lessee‘s Remedies in Case of Lessor‘s Failure to Maintain Lease Item
Where the lease item needs maintenance or repair, the lessee may require the lessor to perform maintenance or repair within a reasonable time.
If the lessor fails to fulfill its obligations of maintenance or repair, the lessee may maintain or repair the lease item on its own at the lessor‘s expense. Where the lessee‘s use of the lease item is impaired due to maintenance or repair thereof, the rent shall be reduced or the lease term shall be extended accordingly.
Article 222 Lessee‘s Obligation of Due Care
The lessee shall keep the lease item with due care and shall be liable for damages if the lease item was damaged or lost due to improper care.
Article 223 Improvement or Addition
Subject to consent by the lessor, the lessee may make improvement on or addition to the lease item.
If the lessee made improvement on or addition to the lease item without consent by the lessor, the lessor may require the lessee to restore the lease item to its original condition or claim damages.
Article 224 Sublease
Subject to consent by the lessor, the lessee may sublease the lease item to a third person. Where the lessee subleases the lease item, the leasing contract between the lessee and the lessor remains valid, and if the third person causes damage to the lease item, the lessee shall pay damages.
Where the lessee subleases the lease item without the consent of the lessor, the lessor may terminate the contract.
Article 225 Benefit Accrued from Lease Item During Lease Term
During the lease term, any benefit accrued from the possession or use of the lease item belongs to the lessee, except otherwise agreed by the parties.
Article 226 Time for Rent Payment
The lessee shall pay the rent at the prescribed time. Where the time of payment was not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, the rent shall be paid at the end of the lease term if it is less than one year; if the lease term is one year or longer, the rent shall be paid at the end of each annual period, and where the remaining period is less than one year, the rent shall be paid at the end of the lease term.
Article 227 Lessor‘s Remedies in Case of Non-Payment of Rent
Where the lessee failed to pay or delayed in paying the rent without cause, the lessor may require the lessee to pay the rent within a reasonable period. If the lessee fails to pay the rent at the end of such period, the lessor may terminate the contract.
Article 228 Lessee‘s Remedies in Case of Third Party Claim; Duty to Notify
If due to any claim by a third person, the lessee is unable to use or accrue benefit from the lease item, the lessee may require reduction in rent or refuse to pay rent.
In case of any claim by a third person, the lessee shall timely notify the lessor.
Article 229 Leasing Contract Not Affected by Change of Ownership
Any change of ownership to the lease item does not affect the validity of the leasing contract.
Article 230 Sale of Dwelling Unit under Lease
Where the lessor is to sell a dwelling unit under a lease, it shall give the lessee a reasonable advance notice before the sale, and the lessee has the right of first refusal under the same conditions.
Article 231 Lessee‘s Remedies in Case of Damage Not Attributable to Itself
Where the lease item was damaged or lost in part or in whole due to any reason not attributable to the lessee, the lessee may require reduction in rent or refuse to pay rent; where the purpose of the contract is frustrated due to damage to or loss of the lease item in part or in whole, the lessee may terminate the contract.
Article 232 Non-Term Lease
Where the term of a lease was not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, such lease is deemed a non-term lease. Either party may terminate the contract at any time, provided that the lessor shall give the lessee a reasonable advance notice before it terminates the contract.
Article 233 Lessee Entitled to Terminate in Case of Danger to Safety or Health
Where the lease item poses a danger to the safety or health of the lessee, the lessee may terminate the contract at any time even if the lessee was aware of the quality non-compliance of the lease item at the time of conclusion of the contract.
Article 234 Lease of Dwelling Unit Assumable
Where the lessee is deceased during the term of a dwelling unit lease, the person jointly living in the unit with the lessee while the lessee was alive may continue leasing it on the terms of the original leasing contract.
Article 235 Condition of Lease Item at End of Lease Term
The lessee shall return the lease item at the end of the lease term. The returned lease item shall be in a condition resulting from its use in the prescribed manner or in a manner consistent with its nature.
Article 236 Effect of Continued Use Beyond Lease Term
Upon expiration of the lease term, if the lessee continues to use the lease item without objection by the lessor, the original leasing contract remains effective, provided that it becomes a non-term lease.
Chapter Fourteen: Financial Leasing Contracts
Article 237 Definition of Financial Leasing Contract
A financial leasing contract is a contract whereby the lessor, upon purchase of the lessee-selected lease item from a lessee-selected seller, provides the lease item to the lessee for its use, and the lessee pays the rent.
Article 238 Terms of Financial Leasing Contract; Writing Requirement
A financial leasing contract includes terms such as the name, quantity, specifications, technical performance, and method of inspection of the lease item, the lease term, the rental components and the time, method and currency of payment, as well as the ownership of the lease item at the end of the lease term, etc.
A financial leasing contract shall be in writing.
Article 239 Lessee‘s Assumption of Buyer‘s Rights
Under the sales contract concluded by the lessor according to the lessee‘s selection of the seller and the lease item, the seller shall deliver the subject matter to the lessee in accordance with the contract, and the lessee enjoys the rights of the buyer in respect of taking delivery of the subject matter.
Article 240 Lessee‘s Assumption of Buyer‘s Remedies in Case of Seller‘s Non-performance
The lessor, the seller and the lessee may agree that any claim arising from the seller‘s non-performance of its obligations under the sales contract will be made by the lessee. Where the lessee makes such a claim, the lessor shall provide assistance.
Article 241 Certain Amendment of Sales Contract Subject to Consent by Lessee
Absent consent by the lessee, the lessor may not amend any lessee-related term in the sales contract concluded by it according to the lessee‘s selection of the seller and the lease item.
Article 242 Exclusion of Lease Item from Bankruptcy Assets of Lessee
Title to the lease item vests in the lessor. In case the lessee enters into bankruptcy, the lease item is not part of its bankruptcy assets.
Article 243 Determination of Rental Components
Unless otherwise agreed by the parties, the rent under a financial leasing contract shall be determined based on the major portion of or full costs of purchasing the lease item and the lessor‘s reasonable profit.
Article 244 Lessor Not Liable for Non-fitness of Lease Item; Exceptions
Where the lease item does not comply with the contract or is not fit for the intended purpose, the lessor is not liable, except where the lessee relied on the skills of the lessor in selecting the lease item or the lessor interfered in the selection thereof.
Article 245 Warranty by Lessor
The lessor shall give warranty in respect of the lessee‘s possession and use of the lease item.
Article 246 Lessor Not Liable for Damage or Injury
If while in the possession of the lessee, the lease item caused personal injury or property damage to any third person, the lessor is not liable.
Article 247 Lessee‘s Obligation of Due Care; Maintenance Obligations
The lessee shall keep and use the lease item with due care.
While in possession of the lease item, the lessee shall perform the obligations of maintenance and repair thereof.
Article 248 Lessor‘ s Remedies in Case of Non-payment by Lessee
The lessee shall pay the rent in accordance with the contract. Where the lessee fails to pay the rent within a reasonable period after receiving demand for payment from the lessor, the lessor may require payment of the full rent; or it may terminate the contract and repossess the lease item.
Article 249 Partial Refund in Case of Termination by Lessor
Where the parties agreed that title to the lease item will vest in the lessee at the end of the lease term, and after paying a major portion of the rent, the lessee is unable to pay the remaining balance, resulting in the lessor‘s termination of the contract and repossession of the lease item, if the value of the repossessed lease item exceeds the rent owed by the lessee and other expenses, the lessee may require partial refund.
Article 250 Ownership of Lease Item at End of Lease Term
The lessor and the lessee may agree on the ownership of the lease item at the end of the lease term. Where ownership of the lease item was not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, title to the lease item shall vest in the lessor.
Chapter Fifteen: Contracts of Hired Works
Article 251 Definition of Contract of Hired Work
A contract of hired work is a contract whereby the hiree completes certain work as required by the hirer and delivers the work product, and the hirer pays the remuneration.
Hired works include works such as processing, custom-made work, repair, reproduction, testing, and inspection, etc.
Article 252 Terms of Contract of Hired Work
A contract of hired work includes terms such as the subject matter of hire, quantity, quality, remuneration, method of hire, supply of materials, time of performance, standard applicable to and method of acceptance inspection, etc.
Article 253 Use of Hiree‘s Own Resources; Delegation of Main Task Subject to Consent
The hiree shall use its own equipment, skills and labor to complete the main tasks, except otherwise agreed by the parties.
Where the hiree has delegated a main task of the hired work to a third person for completion, it shall be responsible to the hirer for the work product completed thereby; if the delegation was not approved by the hirer, the hirer may also terminate the contract.

CONTRACT LAW OF P. R. CHINA 6

 

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