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Economic Contract Law of the People's Republic of
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1982.07.01
STANDING COMMITTEE OF THE NATIONAL PEOPLE'S CONGRESS
ECONOMIC CONTRACT LAW OF THE PEOPLE'S REPUBLIC OF CHINA
 (Adopted  at  the Fourth Session of the Fifth National People's
Congress and promulgated  by Order No.12 of the Chairman of the
Standing Committee of the National People's Congress on December 13,
1981, and effective as of July 1,1982)
CONTENTS
CHAPTER I GENERAL PROVISIONS
CHAPTER II THE CONCLUSION AND PERFORMANCE OF ECONOMIC CONTRACTS
CHAPTER III THE MODIFICATION AND RESCISSION OF ECONOMIC CONTRACTS
CHAPTER IV LIABILITY FOR BREACH OF CONTRACTS
CHAPTER V MEDIATION AND ARBITRATION OF ECONOMIC CONTRACT DISPUTES
CHAPTER VI ADMINISTRATION OF ECONOMIC CONTRACTS
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 economic contracts,
maintaining  the economic  order  of society, increasing economic
effectiveness,  ensuring  the  fulfillment  of  state  plans  and
promoting the development of socialist
modernization.
 @@  Article  2. Economic contracts are agreements between legal
entities for the  purpose of realizing certain economic goals and
clarifying each other's rights and obligations.
 @@  Article  3.  Economic  contracts, except for those in which
accounts are settled  immediately,  shall  be  in  written form.
Documents, telegrams and charts that relate to the modification of
a contract and that are agreed upon  by  the  parties  through
consultation shall also be integral parts of the contract.
 @@  Article 4. In concluding an economic contract, the parties must
comply with  the laws of the state and meet the requirements of state
policies and plans. No unit or individual may use a contract to
engage in illegal activities,  disrupt  economic order, undermine
state plans or damage the interests of the state or the public interest,
seeking illegitimate income.
 @@  Article 5. In concluding an economic contract, the parties must
follow the  principles  of equality and mutual benefit, achieving
agreement through consultation  and  making  compensation for equal
value. No party may impose its own will on the other party, and no
unit or individual may illegally interfere.
 @@  Article  6. As soon as an economic contract is established in
accordance with  the law, it shall have legally binding force, and
the parties must fully perform their obligations as stipulated in
the contract. Neither party may unilaterally modify or rescind the
contract.
@@ Article 7. The following economic contracts shall be void:
(1) contracts violating the law or state policies and plans;
 (2) contracts signed through the use of fraud, coercion or similar
means;
 (3)  contracts  signed by an agent beyond the scope of his power of
agency, or contracts signed by an agent in the name of his principal
with himself or with another person whom he represents; and
 (4)  economic contracts violating the interests of the state or the
public
interest.
 Economic contracts that are void from the time they are concluded
shall have  no legally binding force. If a part of an economic
contract is confirmed  to be void, without affecting the validity of
the remainder, the remainder shall still be valid.
 The  power  to  confirm that an economic contract is void shall be
vested in the contract administration authorities and the people's
courts.
 @@  Article  8.  The provisions of this Law shall apply to all
contracts for purchase and sale, construction projects, processing,
transportation of goods, supply and use of electricity, warehousing,
lease  of  property, loans, property  insurance,  scientific  and
technological cooperation and other economic contracts.
CHAPTER II THE CONCLUSION AND PERFORMANCE OF ECONOMIC CONTRACTS
 @@ Article 9. An economic contract is established once both parties
have,  in  accordance  with  the law, reached agreement through
consultation on the principal clauses of the contract.
 @@  Article 10. When an economic contract is to be concluded by an
agent,  the  agent  must first obtain an authorization from the
authorizing  unit  and sign  the  contract  in the name of the
authorizing unit within the scope of his power of agency, before the
contract directly gives rise to rights and obligations on the part of
the authorizing unit.
  @@  Article  11.  Economic  contracts  that  concern  economic
dealings  in products  or  projects under a mandatory state plan
must be concluded in accordance with state-issued targets; if at the
time of signing the parties cannot reach an agreement, the matter
shall be handled by both parties' superior authorities in charge of
planning. 

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