Tuesday,January 21,2003 Posted: 10:27 BJT(0227 GMT)

CHAPTER XI
CONTRACTS FOR GIFTS

Article 185
A contract of gift is a contract under which the donor gratuitously assigns his property to the donee and the donee expresses his willingness to accept the gift.

Article 186
The donor may revoke the gift before his right on the property is transferred.

The Proceeding Paragraph shall not apply to contracts of gift with a character of social public benefit of moral duty such as disaster or poverty relief etc., and the contracts of gift which have gone through public notary.

Article 187
Where the property given needs to go through procedures such as registration etc., those procedures shall be conducted.

Article 188
Where the donor to the contracts of gift with a character of social public benefit or moral duty such as disaster or poverty relief etc. or the contracts of gift which have gone through public notary fails to deliver the property given, the donee may request delivery.

Article 189
Where the property given is damaged or lost due to the deliberation or gross negligence of the donor. the donor shall be liable for compensation.

Article 190
The gift may be made subject to duties.

Where the gift is made subject to duties, the donee shall perform the duties as agreed upon.

Article 191
The donor is not liable for the defects in the property given. In respect of a gift subject to duties, the donor shall, as to the defect in the property given, bear a seller's guaranty liability within the extent of the subject duties.

Where the donor deliberately fails to inform the donee of the defect in the property or guarantees that there is no defect in the property, he shall be liable for compensation if losses were caused to the donee thereof.

Article 192
The donor may revoke the gift in case the donee is subject to any of the following conditions:
(1) having seriously injured the donor or the close relatives of the donor
(2) in case he is under a duty to support the donor, having failed to perform such a duty
(3) having failed to perform the duties agreed upon in the contract of gift

The donor's right of revocation shall be exercised within one year from the date on which he knows or ought to have known the ground for revocation.

Article 193
Where an illegal act of the donee causes death or loss of civil conduct capacity to the donor, the heir or guardian of the donor is entitled to revoke the gift.

The heir or guardian's right of revocation shall be exercised within six months from the date on which he knows the ground for revocation.

Article 194
In case a gift is revoked by the person who is entitled to the revocation, he may request the donee to return the property given.

Article 195
Where the donor's business operation or family life is seriously affected due to a major deterioration of his financial status. he may refuse to perform the duty of making a gift.

CHAPTER XII
CONTRACTS FOR LOAN

Article 196
A contract of loan is a contract by which the borrower borrows money from the lender under an obligation to repay the money with interest when the term of loan expires.

Article 197
A contract of loan shall be concluded in written form' except for otherwise agreed upon between natural persons.

A contract of loan shall contain clauses on the type, currency, purpose, amount, interest rate, term and manner of repayment etc. of the loan.

Article 198
The lender, in the conclusion of a contract of loan, may require the borrower to provide guaranty. The guaranty shall be handled according to the provisions of the Guaranty Law of the People's Republic of China.

Article 199
In the conclusion of a contract, the borrower shall, according to the requirement of the lender, provide true information on its business activity and financial status in connection with the loan.

Article 200
The interest of the loan shall not be deducted and retained from the capital of the loan in advance. In case it is deducted, the loan shall be repaid and the interest shall be calculated according to the actual amount of loan.

Article 201
Where the lender fails to provide the loan according to the date and amount agreed upon, and thus causes loss to the borrower, it shall be liable for compensation

Where the borrower fails to accept the loan according to the date and amount as agreed upon, it shall pay the interest according to the date and amount as agreed upon.

Article 202
The lender may inspect or supervise the use of the loan according to the agreement between the parties. The borrower as agreed upon shall regularly provide the lender with materials such as financial accounting reports etc.

Article 203
Where the borrower fails to use the loan according to the purpose of the loan agreed upon, the lender may suspend the distribution of the loan, recover the loan before its term expires or discharge the contract.82

Article 204
The interest of a loan provided by a financial institution that handles loan business according to the limits of loan interest stipulated by the People's Bank of China.

Article 205
The borrower shall pay for the interest of the loan within the time limit as agreed. If the time limit for payment of interest is not provided in the contract or the provision is ambiguous, and it still can not be ascertained according to Article 61 of this Law, the borrower shall pay the interest at the same time he repays the loan in case the term of the loan is less than one year. Where the term of the loan exceeds one year, the borrower shall pay the interest at the expiration of each one year period with the balance for the left period less than one year paid at the at the same time he repays the loan.

Article 206
The borrower shall repay the loan in accordance with the time limit as agreed upon. If the time limit for repayment is not provided in the contract or the provision is ambiguous, and it still can not be ascertained according to Article 61 of this Law, the borrower may repay the loan at any time and the lender may urge the borrower to repay it within appropriate time limit.

Article 207
Where the borrower fails to repay the loan in accordance with the time limit as agreed upon, he shall pay overdue interest according to agreement or the relative stipulations of the State.

Article 208
Where the borrower repays the loan before the expiration of the time limit, the loan interest shall be calculated according to the actual term of the loan except for otherwise agreed upon between the parties.

Article 209
The borrower may apply for an extension of the term of the loan before the date for repayment expires. The term of the loan may be extended with consent of the lender.

Article 210
A contract of loan between natural persons shall take effect at the time the lender offers the loan.

Article 211
Where the payment of interest is not agreed upon or the agreement is ambiguous in a contract of loan between natural persons, the loan shall be deemed as without interest.

Where the payment of interest is agreed upon in a contract of loan between natural persons, the interest shall not violate restrictions on loan interest stipulated by the State.

CHAPTER XIII
CONTRACTS FOR LEASE

Article 212
A contract of lease is a contract under which the lessor gives to the lessee the rights of use and profit of the leased thing during the term of the lease, while the lessee pays for the rent agreed upon.

Article 213
A contract of lease shall contain provisions on the name, quantity and use of the leased thing, the term of the lease, the rent and its manner and time limit for payment, and the responsibility for maintenance of the leased thing etc.

Article 214
The term of the lease agreed between the parties shall not exceed 20 years. Otherwise, the exceeded period is void.

When the term of the lease expires, the parties may renew the contract of lease, however, the term agreed upon shall not exceed 20 years from the date on which the contract is renewed.

Article 215
A contract of lease shall be concluded in written form in case the term of the lease is above six months.

Where the parties fail to adopt a' written contract and afterwards disputes arise on the term of lease, the lease shall be deemed as a non- fixed term lease.

Article 216
The lessor shall deliver the thing leased to the lessee according to the contract and during the term of the lease keep it in conformity with its use agreed upon.

Article 217
The lessee shall use the thing leased according to the method agreed upon. If the method of use is not provided in the contract or the provision is ambiguous, and it still can not be ascertained according to Article 61 of this Law, the leased thing shall be used in conformity with its nature.

Article 218
Where the lessee uses the leased thing in a method agreed upon or in conformity with its nature and causes loss to the leased thing thereof, he shall not be liable for compensation.

Article 219
Where the lessee fails to use the leased thing in a method agreed upon or in conformity with its nature an caused loss to the leased thing thereof, the lessor may discharge the contract and request compensation

Article 220
The lessor shall perform his duty of maintenance of the thing leased except for otherwise agreed upon between the parties.

Article 221
Where the lessee needs a repair of the thing leased, he may request the lessor to do so in reasonable time.

In case the lessor fails to perform such a duty, the lessee may repair it himself with the cost borne by the lessor. If the lessee's use of the thing leased is affected due to the repair, the rent of lease shall be reduced accordingly or the term of the lease prolonged.

Article 222
The lessee shall take proper care of the thing leased. Where the lessee fails to take proper care and thus causes damage or loss to the thing leased thereof, he shall be liable for compensation.

Article 223
The lessee may make an improvement or add additional facilities to the thing leased with permission of the lessor.

Where the lessee makes an improvement or adds additional facilities to the thing leased without permission of the lessor, the lessor may request the lessee to restore the thing leased or pay compensation.

Article 224
The lessee may sublease the thing leased to a third party with permission of the lessor. In that case, the contract of lease between the lessor and the lessee keeps effective. And the lessee shall be liable for compensation in case loss is caused to the thing leased due to the fault of the third party.

In case the lessee subleases the thing leased without permission of the Lessor, the lessor may discharge the contract.

Article 225
Unless otherwise agreed upon between the parties, profit accrued from the lessee's possession and use of the thing leased during the term of lease shall belong to the lessee.

Article 226
The lessee shall pay the rent according to the time limit agreed upon. If the time limit is not provided in the contract or the provision is ambiguous, and it still can not be ascertained according to Article 61 of this Law, the lessee shall pay the rent at the expiration of the term of lease. However, if the term of lease exceeds one year, the rent shall be paid at the expiration of each year period with the balance for the left period less than one year paid at the expiration of the term of the lease.

Article 227
Where the lessee fails to pay or delays in paying the rent without appropriate reasons, the lessor may require the lessee to pay in a reasonable time. If the lessee fails to pay within that time, the lessor may discharge the contract.

Article 228
Where the claim of right by a third party affects the lessee in his using and making profit out of the thing leased, the lessee may request a reduction or exemption of the rent.

In case a third party claims right in the thing leased, the lessee shall give notice to the lessor in due time.

Article 229
An alteration in the ownership of the thing leased during the term of the lease shall not affect the validity of the contract of lease.

Article 230
Where the lessor proposes to sell a house leased, he shall notify the lessee within reasonable time before the sale. The lessee has priority in purchasing the house with the same terms of purchase

Article 231
Where an incident that is not attributed to the lessee causes partial or entire destruction or loss to the thing leased, the lessee may request a reduction or exemption of the rent. In case the partial or entire destruction or loss to the thing leased causes failure in the realization of the purpose of the contract. the lessee may discharge the contract.

Article 232
Where the term of lease is not provided in the contract or the provision is ambiguous and it still an not be ascertained according to Article 61 of this Law, the lease is deemed as a non-fixed term lease The parties may at any time discharge the contract. The lessor however, shall notify the lessee before a reasonable time if he proposes to discharge the contract.

Article 233
Where the thing leased endangers the safety or health of the lessee, the lessee may a any me discharge the contract notwithstanding that he knows the thing leased is not qualified during the conclusion of the contract.

Article 234
If the lessee dies during the term of a house lease, persons who live with him before his death may lease the house according to the original contract of lease.

Article 235
The lessee shall return the thing leased at the expiration of the term of lease. The thing returned shall be in conformity with the condition of the thing leased as if it were used in a method agreed upon or in conformity with its nature.

Article 236
Where the lessee continues to use the thing leased after the expiration of the lease and the lessor does not object to that effect, the original contract of lease shall keeps valid, however, the term of lease shall become a non4xed term.

CHAPTER XIV
CONTRACTS FOR FINANCIAL LEASING

Article 237
A financial leasing contract is a contract under which the lessor according to the lessee's option on the seller and the thing leased buys the thing leased from the seller for the lessee's use, while the lessee pays the rent.

Article 238
A financial leasing contract shall contain clauses concerning the name, quantity, specification, technical function, method of inspection and lease term of the thing leased, the composition of rent and its term and manner of payment, types of currency for payment, and the attribution of the thing leased at the expiration of the lease term etc.

A financial leasing contract shall be in written form.

Article 239
Where the lessor according to the option of the lessee on the seller and the thing leased has concluded a sales contract, the seller shall deliver the subject matter to the lessee according to the agreement, while the lessee has rights as a buyer with respect to the acceptance of the subject matter.

Article 240
The lessor, the seller and the lessee may agree upon that the right of claim shall be exercised by the lessee if the seller fails to perform his duties in the sales contract. In this case the lessor shall give assistance.

Article 241
Where the lessor has concluded a sales contract according to the options of the lessee on the seller and the thing leased. without permission of the lessee, the lessor shall not modify any content of the contract with respect to the lessee.

Article 242
The lessor has ownership of the thing leased. In case the lessee goes bankrupt, the thing leased does not become bankruptcy property.

Article 243
Unless otherwise agreed upon between the parities, the rent of the financial leasing contract shall be ascertained according to the major part or the full cost for the purchase of the thing leased and the reasonable profit that may be accrued to the lessor.

Article 244
In case the thing leased is not in conformity with the agreement or the use of the thing itself, the lessor shall not be liable unless that the lessee has relied on the skill of the lessor in designating the thing leased or the lessor has intervened in the selection of the thing leased.

Article 245
The lessor shall guarantee the right of the lessee to the possession and use of the thing leased.

Article 246
If the thing leased causes property damage or physical injury to a third party during the period it is possessed by the lessee, the lessor is not liable.

Article 247
The lessee shall take proper care and use of the thing leased.

The lessee shall perform his duty of keeping the thing leased in good repair during the period it is in his possession.

Article 248
The lessee shall pay the rent as agreed upon. Where after summon exhortation the lessee fails to pay in due time, the lessor may request full payment of rent or discharge the contract and recover the thing leased.

Article 249
Where the lessor and the lessee have made an agreement upon that the thing leased shall belong to the lessee at the expiration of the lease, and the lessee has already paid most of the rent, but is unable to afford the residual rent, in this case if the lessor discharges the contract and recovers the thing leased, the lessee may request partial reimbursement so long as the returned thing is of higher value than the rent unpaid and other cost.

Article 250
The lessor and the lessee may agree upon the attribution of the thing leased at the expiration of the lease. If the attribution is not provided in the contract or the provision is ambiguous, and it still can not be ascertained according to Article 61 of this Law, the thing leased shall belong to lessor.

CHAPTER XV
CONTRACTS FOR WORK

Article 251
A contract for work is a contract under which the contractor undertakes work and transfers its achievement of work to the customer according to the latter's requirement, and the customer is bound to pay remuneration thereof.

The work contracted includes processing, production on order, repair, reproduction, test, examination and etc.

Article 252
A contract of work shall contain clauses on the object, quantity, quality, remuneration, manner of work, supply of materials, time limit for performance, inspection standard and method of the work etc.

Article 253
Unless otherwise agreed upon between the parties, the contractor shall use its own equipment, technology and labor force to complete the main part of the work.

In case the contractor assigns the main part of his contracted work to a third party, he shall be responsible to the customer with respect to that part of work completed by the third party; if the assignment is made without agreement of the customer, the customer may discharge the contract.

Article 254
The contractor may assign the auxiliary part of the work contracted to a third party. Where the contractor has assigned the auxiliary part of the work to a third party, he shall be responsible to the customer on that part of work.

Article 255
Where the materials are to be supplied by the contractor, he shall select materials as agreed upon and subject to the inspection of the customer.

Article 256
Where the materials are to be supplied by the customer, the customer shall supply as agreed upon, the contractor shall inspect the materials supplied by the customer in due time and if he discovers that they are not in conformity with the agreement, he shall notify the customer in due time to make a replacement or supplement.

The contractor may not, without permission, replace any materials supplied by the customer or change any spare parts that do not need to be repaired.

Article 257
Where the contractor discovers that the drawings or technical requirements are not appropriate, he shall notify the customer in due time. If the contractor was caused loss due to the customer's reluctance to make a reply etc., the customer shall be liable for compensation.

Article 258
Where the customer modifies his requirement to the contracted work during the course of construction and thus causes loss to the contractor, the customer shall compensate for the loss of the contractor.

Article 259
Where the contracted work needs assistance from the customer, the customer shall perform his duty of assistance.

In case the contracted work is unable to be completed due to the customer not performing his duty of assistance, the contractor may urge the Customer to perform his duty within reasonable time; the contractor in this case may postpone his performance as well. Where the customer does not perform his duty overdue, the contractor may discharge the contract.

Article 260
The contractor shall during the course of construction, accept necessary inspection and supervision by the customer. The customer shall not obstruct the contractor's normal work by his inspection and supervision.

Article 261
On completion of the contracted work, the contractor shall deliver the achievement of work and the necessary technical materials and relevant quality certificates to the customer. The latter shall inspect and accept the achievement of work.

Article 262
Where the achievement of work delivered by the contractor does not meet the quality standard, the customer may request the contractor to bear the liability of repair, replacement, reduction of the remuneration or compensation for loss etc.

Article 263
The Customer shall pay the remuneration according to the time limit agreed upon. If the time limit for payment is not provided or the provision is ambiguous, and it still can not be ascertained according to Article 61 of this Law, the customer shall pay at the time of the delivery of the achievement of work. If the achievement of work is to be delivered by parts, the customer shall pay the remuneration for each part accordingly.

Article 264
Unless otherwise agreed upon between the parties, in case the customer does not pay the remuneration or the price of materials etc., the contractor has a lien on the achievement of the work.

Article 265
The contractor shall take proper care of the materials supplied by the customer and the achievement of work. In case the materials or the achievement of work was caused damage or loss due to the lack of proper care the contractor shall be liable for compensation.

Article 266
The contractor shall keep confidential in accordance with the requirement of the customer He shall not. without permission of the customer keep duplications and technical materials in respect of the contracted work.

Article 267
Unless otherwise agreed upon between the parties, the joint contractors shall bear joint and several liability to the customer.

Article 268
The customer may at any time discharge a contract for work, however he shall be liable for compensation if loss is caused to the contractor thereof.

CHAPTER XVI
CONTRACTS FOR CONSTRUCTION PROJECTS

Article 269
A contract for construction projects is a contract under which the contractor undertakes project construction and the employer pays for the price.

Contracts for construction projects include survey design and building contracts.

Article 270
A contract for construction projects shall be concluded in written form.

Article 271
The bid invitation and bidding activities in construction projects shall be carried out openly, fairly and justly according to the provisions of relevant laws.

Article 272
The employer may conclude a contract for construction projects with a general contractor or respectively sign a survey, design and building contract with the surveyor, designer and builder.

The employer may not divide a contract which shall be completed by one contractor into parts and then issue them to several contractors.

With permission of the employer, the general contractor or the contractor for survey, design or building may assign the part of work he contracted to a third party. The third party shall bear joint and several liabilities to the employer with the general contractor or the contractor for survey, design or building with respect to that part of work completed by himself. The contractor shall not assign the entire construction project he has contracted to a third party or divide it into parts and then assign them to a third in the name of subcontract.

The contractor is prohibited from subcontracting the construction projects to any institutions without equivalent qualifications. The subcontractor is prohibited from re-subcontracting. The construction for the main part of the project must be completed by the contractor himself.

Article 273
Contracts for major construction projects of the State shall be concluded in accordance with procedures prescribed by the Sate and the investment plans and feasibility research report approved by the State.

Article 274
Survey and design contacts shall contain clauses on time limit for delivery of related basic materials and documents (including an estimated budget), quality requirements, cost and other terms for cooperation etc.

Article 275
A construction contract shall contain provisions on the scope of the projects, the construction period, the start and completion time for the interim construction projects, the quality of the project, the cost of the project, the time for delivery of technical data, the responsibilities for supply of materials and equipment. the allocation of funds and settlement of accounts, the inspection and acceptance of projects, the scope of quality guarantee, the period of quality warranty. the cooperation between the parties etc..

Article 276
Where the construction projects are supervised, the employer shall conclude a written mandate contract for supervision with the supervisor. The rights, duties and legal liabilities of the employer and the supervisor shall be in accordance with the provisions on contracts in this Law and those of other relevant laws and regulations.

Article 277
Under a situation not to obstruct the normal work of the contractor, the employer at any time may inspect the progress and quality of the construction work.

Article 278
Before a concealed project is to be concealed, the contractor shall inform the employer to inspect toe project. In case the employer fails to conduct an inspection in due time. the contractor may postpone the dead line for construction and request compensation for stop and delay of work as well.

Article 279
The employer shall inspect the construction projects upon completion according to the construction drawings and written instructions and projects inspection regulations and quality examination standards issued by the State.

Construction projects may be delivered for use only after it has been inspected upon completion. Projects without inspection or found unqualified in inspection may not be delivered for use.

Article 280
Where the quality of survey or design is not in conformity with the agreement or the survey or design documents are not submitted in due time, the construction period is thus prolonged and losses are thereby caused to the employer, the surveyor or designer shall continue to improve the survey or design, reduces or forfeits his survey or design fee and make compensation for the losses.

Article 281
Where due to the fault of the constructor, the quality of the project is not in conformity with the agreement, the employer is entitled to demand that the project be repaired, remedied or reconstructed within reasonable time by the constructor without extra payment. And if such repair, remedy or reconstruction causes overdue delivery of the project, the constructor shall be liable for breach of contract.

Article 282
Where due to the fault of the contractor, the construction projects causes physical and property loss in the reasonable term of use, the contractor shall be liable for compensation.

Article 283
Where the employer fails to supply the raw materials, equipment, site, funds, technical materials etc. according to the time and requirements agreed upon, the contractor may request to postpone the dead line for completion of the project. He may also request compensation for stop and delay of work as well.

Article 284
Where due to the fault of the employer, the project is stopped or postponed in the course of the construction, the employer shall adopt measures to offset or reduce the losses and at the same time compensate the contractor for losses and actual expenses incurred thereof due to stop or delay of work, changes in the transportation, transfers for machinery and equipment, overstocking of materials and spare parts etc.

Article 285
Where the plans are modified, the data supplied are not accurate or the conditions for survey and design work are not provided in due time and, as a result thereof, the survey and design work has to be redone or suspended, or the design revised, the employer shall pay additional expenses for the amount of work actually undertaken by the contractor.

Article 286
Where the employer fails to pay the construction price, the contractor may urge the employer to pay within reasonable time. If the employer fails to pay with the time limit, except for those not suitable to be converted into money or auctioned in accordance with their character, the contractor may convert the project into money after negotiation with the employer. He may also apply to the People's Court for auction the project in accordance with governing law. The construction price shall be reimbursed out of funds from the conversion or auction of the project with priority.

Article 287
Relevant provisions on contract of work shall apply in absence of provisions in this Chapter.
 
 
Print