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CONTRACT LAW OF P. R. CHINA 7
Sources:International Trade Law, Time:2017-03-08 09:50, Click:, Comment
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attributable to such third person, the agent shall disclose the third person to the principal, allowing it to exercise the agent‘s rights against such third person, except where the third person would not have entered into the contract with the agent had it known the identity of the principal.
Where the agent failed to perform its obligation toward the third person due to any reason attributable to the principal, the agent shall disclose the principal to the third person, allowing the third person to select in alternative either the principal or the agent as the other contract party against whom to make a claim, provided that the third person may not subsequently change its selection of the contract party.
Where the principal exercises the rights of the agent against the third person, the third person may avail itself of any defense it has against the agent. Where the third person selects the principal as the other party to the contract, the principal may avail itself of any defense it has against the agent as well as any defense the agent has against the third person.
Article 404 Property Acquired by Agent
Any property acquired by the agent in the course of handling the entrusted affair shall be turned over to the principal.
Article 405 Remuneration to Agent
Upon completion of the entrusted affair by the agent, the principal shall pay the remuneration thereto. Where the agency appointment contract is terminated or the entrusted affair is not capable of being completed due to any reason not attributable to the agent, the principal shall pay to the agent an appropriate amount of remuneration. If the parties have agreed otherwise, such agreement prevails.
Article 406 Liability of Agent; Unauthorized Act
Under an agency appointment contract for value, if the principal sustains any loss due to the fault of the agent, the principal may claim damages. Under a gratuitous agency appointment contract, if the principal sustains any loss due to the agent‘s intentional misconduct or gross negligence, the principal may claim damages.
Where the agent acted beyond the scope of authorization, thereby causing loss to the principal, it shall pay damages.
Article 407 Agent Entitled to Indemnification in Case of Loss
In the course of handling the entrusted affair, if the agent sustains any loss due to a reason not attributable to itself, the agent may seek indemnification from the principal.
Article 408 Additional Appointment by Principal Subject to Consent
Subject to consent by the agent, the principal may, in addition to appointing the agent, also appoint a third person to handle the entrusted affair. If such appointment results in loss to the agent, it may seek indemnification from the principal.
Article 409 Joint and Several Liability of Joint Agents
Where two or more agents jointly handle the entrusted affair, they are jointly and severally liable to the principal.
Article 410 Right to Terminate at Any Time
Either the principal or the agent may terminate the agency appointment contract at any time. Where the other party sustains any loss due to termination of the contract, the terminating party shall indemnify the other party, unless such loss is due to a reason not attributable to the terminating party.
Article 411 Discharge Due to Incapacitation
An agency appointment contract is discharged when either the principal or the agent is deceased or incapacitated or enters into bankruptcy, except where the parties have agreed otherwise, or where discharge is inappropriate in light of the nature of the entrusted affair.
Article 412 Agent‘s Obligations in Case of Principal‘s Incapacitation
Where discharge of the agency appointment contract due to the death, incapacitation or bankruptcy of the principal will harm the principal‘s interests, the agent shall continue to handle the entrusted affair before an heir, legal agent or liquidation team thereof takes over the entrusted affair.
Article 413 Heir‘s Obligations in Case of Agent‘s Incapacitation
If the agency appointment contract is discharged as a result of the death, incapacitation or bankruptcy of the agent, the heir, legal agent or liquidation team thereof shall timely notify the principal. Where discharge of the agency contract will harm the principal‘s interests, before the principal makes any care-taking arrangement, the heir, legal agent or liquidation team of the agent shall take the necessary measures.
Chapter Twenty Two Trading-Trust Contracts
Article 414 Definition of Trading-Trust Contract
A trading-trust contract is a contract whereby the trustee-trader conducts trading activities in its own name for the trustor, and the trustor pays the remuneration.
Article 415 Expenses Borne by Trustee-trader
The expenses incurred by the trustee-trader in the course of handling the entrusted affair shall be borne by the trustee-trader, except otherwise agreed by the parties.
Article 416 Trustee-trader‘s Obligation to Exercise Due Care
Where the trustee-trader is in possession of the trust item, it shall keep the trust item with due care.
Article 417 Disposal of Defective Trust Item by Trustee-trader
If a trust item was defective, perishable or susceptible to deterioration at the time it was delivered to the trustee-trader, upon consent by the trustor, the trustee-trader may dispose of the item; where the trustee-trader is unable to contact the trustor in time, it may dispose of the trust item in a reasonable manner.
Article 418 Pricing of Trust Item
Where the trustee-trader is to sell the trust item below, or buy the trust item above, the price designated by the trustor, it shall obtain consent from the trustor. If such sale was effected without consent by the trustor, and the trustee-trader made up the deficiency on its own, it is binding on the trustor.
Where the trustee-trader sold the trust item above, or purchased the trust item below, the price designated by the trustor, the remuneration may be increased in accordance with the contract. Where such matter was not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, the benefit belongs to the trustor.
Where the trustor gives special pricing instruction, the trustee-trader may not make any sale or purchase in contravention thereof.
Article 419 Trustee-trader Acting as Purchaser or Seller
Where the trustee-trader is to sell or purchase a commodity the price of which is fixed by the market, the trustee-trader may act as the purchaser or seller itself, unless the trustor has otherwise manifested its intention.
Where the trustee-trader is in a situation described in the previous paragraph, it may still require payment of remuneration from the trustor.
Article 420 Trustor‘s Obligation to Take Delivery; Trustee-trader‘s Remedies in Case of Trustor‘s Failure to Take Delivery
Once the trustee-trader purchased the trust item in accordance with the contract, the trustor shall timely take delivery. Where after receiving demand from the trustee-trader, the trustor refuses to take delivery without cause, the trustee-trader may place the trust item in escrow in accordance with Article 101 hereof.
Where the trust item fails to be sold or the trustor withdraws it from sale, the trustee-trader may place the trust item in escrow in accordance with Article 101 hereof if the trustor fails to retrieve or dispose of it after receiving such demand from trustee-trader.
Article 421 Trustee-trader‘s Rights and Obligations as Party to Contract with Third Person
Where the trustee-trader entered into a contract with a third person, it directly enjoys the rights and assumes the obligations thereunder.
Where the third person failed to perform its obligations, thereby causing damage to the trustor, the trustee-trader shall be liable for damages, except otherwise agreed by the trustee-trader and the trustor.
Article 422 Trustee-trader‘s Right to Remuneration; Possessory Lien in Case of Non-payment
Where the trustee-trader has completed the entrusted matter or has partially completed the entrusted matter, the trustor shall pay the appropriate remuneration thereto. Where the trustor fails to pay the remuneration within the prescribed period, the trustee-trader is entitled to a possessory lien on the trust item, except otherwise agreed by the parties.
Article 423 Provisions Governing Agency Appointment Contracts Applicable
A matter not provided for in this Chapter shall be governed by the relevant provision applicable to agency appointment contracts.
Chapter Twenty Three: Brokerage Contracts
Article 424 Definition of Brokerage Contract
A brokerage contract is a contract whereby the broker presents to the client an opportunity for entering into a contract or provides the client with intermediary services in connection with the conclusion thereof, and the client pays the remuneration.
Article 425 Broker‘s Obligation to Provide True Information
The broker shall provide true information concerning matters relevant to the conclusion of the proposed contract.
Where the broker intentionally concealed any material fact or provided false information in connection with the conclusion of the proposed contract, thereby harming the client‘s interests, it may not require payment of any remuneration and shall be liable for damages.
Article 426 Broker Entitled to Remuneration
Once the broker facilitated the formation of the proposed contract, the client shall pay the remuneration in accordance with the brokerage contract. Where remuneration to the broker was not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, it shall be reasonably fixed in light of the amount of labor expended by the broker. Where the broker facilitated the formation of the proposed contract by providing intermediary services in connection therewith, the remuneration paid to the broker shall be equally borne by parties thereto.
Where the broker facilitated the formation of the proposed contract, the brokerage expenses shall be borne by itself.
Article 427 Broker Entitled to Reimbursement in Case of Failure to Conclude Proposed Contract
Where the broker failed to facilitate the formation of the proposed contract, it may not require payment of remuneration, provided that it may require the client to reimburse the necessary brokerage expenses incurred.
SUPPLEMENTARY PROVISIONS
Article 428 Effectiveness; Repealing Certain Laws
This Law shall take effect as from October 1, 1999, and the Economic Contract Law of the People‘s Republic of China, the Foreign-related Economic Contract Law of the People‘s Republic of China, and the Technology Contract Law of the People‘s Republic of China shall be repealed simultaneously.
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