Appendix 3.1: Contract Law of the People s Republic of China

Chapter 1: General Provisions

Article 1     This Law is formulated with a view to protecting the lawful rights and interests of the parties to contracts, maintaining the social economic order and promoting the progress of the socialist modernization drive.

Article 2     A contract in this Law refers to an agreement establishing, modifying and terminating the civil rights and obligations between subjects of equal footing, that is, between natural persons, legal persons or other organizations.

Agreements involving personal status relationship such as on matrimony, adoption, guardianship etc shall apply the provisions of other Laws.

Article 3     The parties to a contract shall have equal legal status. No party may impose its will on the other party .

Article 4     The parties shall have the rights to be voluntary to enter into a contract in accordance with the law. No unit or individual may illegally interfere.

Article 5     The parties shall abide by the principle of fairness in defining the rights and obligations of each party.

Article 6     The parties must act in accordance with the principle of good faith, no matter in exercising rights or in performing obligations.

Article 7     In concluding and performing a contract, the parties shall abide by the laws and administrative regulations, observe social ethics. Neither party may disrupt the socio-economic order or damage the public interests.

Article 8     As soon as a contract is established in accordance with the law, it shall be legally binding on the parties. The parties shall perform their respective obligations in accordance with the terms of the contract. Neither party may unilaterally modify or rescind the contract.

The contract established according to law shall be under the protection of law.