CHAPTER VI
TERMINATION
Article 91
A rights and duties of contract terminate under the following circumstance:
(1) the debt is fulfilled according to the agreement
(2) the contract is discharged
(3) debt is set off
(4) the debtor deposits the subject matter according to law
(5) the creditor relieves the debt
(6) the obligatory right and debt are mixed to one party
(7) other circumstance of termination provided by law or agreed by parties
Article 92
After the rights and duties of a contract terminate, the parties shall perform duties of notice, assistance, confidentiality etc. conforming to the principle of good faith and in accordance with trade usage.
Article 93
The parties may discharge contract upon negotiation.
The parties may agree on terms for discharge by one party. When the terms are fulfilled, the party may discharge the contract.
Article 94
The parties may discharge the contract in case of the following conditions:
(1) if the contract purpose can not be realized due to force majeure
(2) before the expiration of the period for the performance, if one party explicitly expresses or demonstrates through act that the performance of the main debt is not intended
(3) if one party delays the performance of main duty and fails to fulfill the performance within reasonable period after summon exhortation
(4) if due to the delay in performance of obligation or other breach of contract by one party, the purpose of the contract can not be realized
(5) other conditions provided by law
Article 95
If there is a time limit for exercising right of discharge provided by law or agreed by the parties and the party fails to exercise the right before the expiration of contract, the right extinguishes.
The right of discharge extinguishes if the party fails to exercise the right within reasonable period after the other party's summon exhortation, though no time limit is provided by law or agreed by the parties.
Article 96
The party shall notify the other party if it suggests the discharge of the contract according to clause 2 of Article 93 and Article 94 of this law. The contract is discharged at the time the other party receives the notice. The other party may apply to the people's court or an arbitration body for affirming the effect of the contract in case of objection.
If the procedures of approval or registration is required by the laws or administrative regulations, the provisions of the laws of administrative regulations shall apply.
Article 97
After discharge of the contract, the part not yet performed shall stop performance as to the part already performed, the party may, according to the performance and the nature of the contract, claim for restitution, take other remedial measures and is entitled to compensation of losses.
Article 98
The termination of the rights and duties of a contract does not affect the effect of provisions of settlement and liquidation.
Article 99
If the parties owe obligation due to each other and the type and nature of the subject matter of the obligation is the same, any party may set off his own duty against that of the other party unless the off-set is not permitted according to the nature of the contract or legal provisions.
The party suggesting off-set should notify the other party. The notice comes into effect at the time the other party receives. No condition or time limit shall be attached to the notice of off-set.
Article 100
If the parties owe obligation due to each other, though the type and nature of the subject matter is not the same, obligation may be set off upon the parties' agreement.
Article 101
The debtor may deposit the subject matter if the obligation is difficult to fulfill under following circumstances:
(1) the creditor refuses the acceptance without reasonable ground
(2) the creditor's whereabouts is unknown
(3) the debtor dies and the heir is not yet determined or loses capacity for conduct and the successor or guardian is not yet determined
(4) other circumstances provided by law
If the subject matter is not suitable for the deposit or the cost for the deposit is excessively high, the debtor may sell through auction or sell off the subject matter and deposit the price acquired
Article 102
After the deposit of the subject matter, the debtor shall notify in time the creditor or the successor or the guardian of the creditor unless the creditor's whereabouts is unknown.
Article 103
After the deposit of the subject matter, risk of damage and loss of the subject matter is borne by the creditor. The accruements of the subject matter during the deposit period belong to the creditor Cost for the deposit is borne by the creditor.
Article 104
The creditor may take out deposited subject matter every time. But if creditor has matured debt to toe debtor, before the creditor hasn't performed debt or supplied security, the competent authorities for submitted subject matter of an obligation shall forbid him to take out deposited subject matter according to the request of debtor.
The right for taking out deposited subject matter of creditor will extinguish. if he fails to exercise this right within 5 years from the date of debtor's submission of the subject matter of an obligation to competent authorities .Deposited subject matter after subtraction of cost for debtor's submission of the subject matter of an obligation to competent authorities shall belong to State.
Article 105
If the creditor relieves the debtor from the debt in whole or in part. the rights and duties of the contract terminate respectively in whole or in part.
Article 106
If the obligatory right and debt are mixed to one party, the rights and duties of the contract terminate unless the interest of a third person is involved.
CHAPTER VII
LIABILITY FOR BREACH OF CONTRACT
Article 107
The party who fails to fulfill its contractual duty or whose performance of contractual duty fails to conform to the contract shall be liable for the breach of contract such as specific performance, adopting remedial measures, or compensation for losses etc.
Article 108
One party who explicitly expresses or demonstrates through his own act that the performance of the contractual duty is not intended. the other party may claim him to be liable for breach of contract before the expiration of the period for performance.
Article 109
If one party fails to pay the price or remuneration, the other party may claim the payment of the price or remuneration.
Article 110
If one party fails to perform the non-monetary obligation or the performance of the non-monetary obligation fails to conform to the agreement the other party may claim for performance except for the following cases
(1) the obligation cannot be perform in law or in fact
(2) the object of the obligation is not suitable for enforcement or the cost for enforcement is excessively high
(3) the creditor fails to claim for performance within reasonable period
Article 111
If the quality fails to conform to the agreement the liability for breach of contract shall be borne according to the agreement.
If terms of the liability for breach of contract is not agreed on or the term is ambiguous and cannot be determined according to Article 61of this Law, the harmed party may choose reasonably repair exchange reproduction reduction of price return of goods remuneration and other liabilities for breach of contract from the other party according to the nature of the subject matter and extent of the losses.
Article 112
If the party fails to perform contractual duties or the performance of the duties fails to conform to the Agreement it shall after performing the duties or adopting remedial measures compensate for the losses to the other party in case the other party still suffers from other losses.
Article 113
Where one party fails to perform contractual duties or the performance fails to conform to the agreement and Thereby causes losses to the other party the amount for losses compensated shall be equal to the losses caused by the breach of contract including possible profit realized if contract duly performed but shall not Exceed the possible loss caused by breach of contract which can be foreseen by the breaching party at the time of contract formation.
Where the business operator has fraudulent conduct in supplying gooks and service for consumer it shall take liability for compensation according to the provisions in "law of the people's Republic of China on Protection of the Rights and interests of Consumers".
Article 114
The parties may agree that one party pays liquidated damages to the other in case of breach of contract according to the circumstance of the breach they may also agree on the calculating manner of damages caused by the breach.
If the agreed liquidated damage is excessively higher than the actual loss the party may apply to the People's court or an arbitration body for suitable mitigation if the agreed liquidated damage is excessively lower than the actual loss the party may apply to the people's court or an arbitration body for a suitable extension.
Article 115
The parties may agree that one party pays deposit to the other as warranty for the creditor?．s right according to ?＜law of Guarantee of the People?．s Republic of China?＼ After the debtor performs the duties the deposit shall be balanced against the price or recovered The party who pays the deposit fails to perform the agreed duties it has no right to recover the deposit , if the party who accepts deposit fails to perform the agreed duties, it shall return the deposit twice as much.
Article 116
Where the parties have agreed upon both liquidated damages and deposit, one party may choose either clause to apply when the other breaches the contract
Article 117
If the non-performance is caused by force majeure, the liability shall be relieved in whole or in part in accordance with the effect of force majeure unless otherwise provided by law if force majeure exists after the delay of performance, liability can not be relieved.
The force majeure in this law refers to the objective circumstances that can not be predicted, avoided or overcome.
Article 118
If the party fails in performance due to force majeure, he shall notify the other party in time to mitigate possible loss caused to the other party and shall provide verification within reasonable time.
Article 119
After one party's breach of contract, the other party shall take appropriate measure to avoid the extension of loss extended.
Reasonable cost paid by the party to avoid the extension of loss shall be borne by the breaching party.
Article 120
The parties shall take liability respectively if both are in breach.
Article 121
One party shall take the liability of breach of contract to the other party if the breach is caused by a third party. The dispute between the party and the third person shall be handled according to legal provisions or agreements.
Article 122
Where one party?．s breach of contract infringe upon the other party?．s personal or property interests, the aggrieved party is entitled to choose the liability for breach of contract according to this Law or the liability for tort according to other laws.
CHAPTER VIII
OTHER PROVISIONS
Article 123
Where there are provisions concerning contract in other laws, the said provisions shall apply accordingly.
Article 124
Where contracts are not explicitly provided by specific provisions of this Law or by other laws, the general provisions shall apply and the most similar provisions in the specific provisions of this Law or in other laws may be referred to.
Article 125
When disputes arise as to the understanding of a contract provision, the true meaning of the provision shall be ascertained according to the wording of the provision in the contract, relevant contract provisions and the purpose of the contract, and in conformity with trade usage and principle of good faith.
Where the text of contract is concluded in over 2 languages and parties have agreed that they have equal effect, the wording in different texts shall be assumed to have the same meaning. Where the different texts use inconsistent wording, it shall be construed according to the purpose of the contract.
Article 126
The parties to a foreign-related contract may choose the law applied to contract dispute, unless the law provides otherwise. Where the parties to a foreign-related contract have not made a choice, the law of the country having the closest connection with the contract shall apply.
Laws of the People?．s Republic China shall be applied to contracts concluded by Chinese-foreign equity joint venture, Chinese-foreign contractual joint venture and Chinese-foreign cooperative exploration and development of natural resource, which is performed in the territory of the People's Republic of China.
Article 127
The administration of industry and commerce and other competent administrative department concerne~ shall, within their functions~ and powers, supervise and deal with the illegal activities which take advantage 0 the contract to harm the State and social public interests according to the provisions provided by law an~ administrative regulations. If the activity constitutes a crime, it shall be prosecuted for the crimina responsibility according to law.
Article 128
The parties may settle contract disputes through compromise or conciliation.
If the parties are unwilling to settle their dispute through compromise or conciliation, or if the compromise 0 conciliation proves unsuccessful, they may submit the dispute to an arbitration. body for arbitration accordin( to their arbitration agreement. The parties of foreign-related contracts may submit disputes for arbitration to Chinese arbitration body or other arbitration body according to their arbitration agreement.
If no arbitration agreement is reached or the arbitration agreement is void, the parties may bring Suit in people's court. The parties shall perform judgements, arbitral awards and conciliation which have take effect In case of refusal by one party. the other party may claim to the People's court for enforcement.
Article 129
The time limit of bringing suit or applying for arbitration in a dispute over an international contract of sales C goods and contract of technology export and import shall be four years, counting from the day when th party is aware or ought to be aware of its rights' being infringed upon.
As to the time limit of bringing suit or applying for arbitration in other contract disputes, relevant legal provisions shall apply accordingly.
SPECIFIC PROVISIONS
CHAPTER IX
CONTRACTS FOR SALES
Article 130
A sales contract is a contract under which the seller transfers its ownership of the subject matter to the buyer, while the buyer pays for the price.
Article 131
Subject to Article 12 of this Law, the contents of a sales contract may contain clauses on manner of package, criteria and method for inspection, means of settlement of account, language used in the contract and validity etc.
Article 132
The subject matter sold shall be a matter owned by the seller or is subject to his disposition.
In case a subject matter is prohibited or restricted from being transferred by laws or administrative regulations, those laws and regulations shall be observed.
Article 133
Unless otherwise provided in law or agreed between the parties, the ownership of the subject matter transferred at the time the subject matter is delivered.
Article 134
The parties may in a sales contract agree upon a clause that the ownership of the subject matter shall belong to the seller in case the buyer fails to perform his duty of paying for price or other duties.
Article 135
The seller shall perform his duties of delivering the subject matter or any documents for taking delivery of subject matter, and transferring the ownership of the subject matter to the buyer.
Article 136
The seller shall, according to the agreement between the parties or trade usage, hand over to the buyer other relevant documents and materials in addition to the documents for taking delivery of the subject matter.
Article 137
Unless otherwise agreed upon between the parties or provided by law, if the subject matter to be sold is computer software or drawings etc. which possess intellectual property rights, the intellectual property rights of the subject matter does not belong to the buyer.
Article 138
The seller must deliver the subject matter within the time limit agreed upon; if a period of time for delivery is fixed at any time within that period.
Article 139
Where the time limit for delivery is not provided in the contract or the provision is ambiguous Article 61 and ltem 4 of Article 62 of this Law shall apply.
Article 140
Where the subject matter has been in the buyer's possession before the conclusion of the contract, the time when the contract takes effect shall be deemed as the time of delivery.
Article 141
the seller shall deliver the subject matter at the place agreed upon.
Where the place of delivery is not provided in the contract or the provision is ambiguous and it still can not ascertained in accordance with Article 61 of this Law, the following provisions shall apply:
(1) If the subject matter needs to be transferred, the seller shall hand in the subject mater over to the first r for transmission to the buyer
(2) where the subject matter doesn't need to be transferred, and at the time of conclusion of the contract. the seller and the buyer knew where the subject matter were, the seller shall deliver the subject mater at that place. If the particular place of the subject matter was not known to the parties. the subject matter hall be delivered at the place where the seller had his place of business at the time the contract was concluded
Article 142
The risk of damage or loss in respect of the subject matter shall be borne by the seller before delivery of the matter while by the buyer after delivery of the subject matter unless otherwise agreed upon between the parties or provided by law.
Article 143
where the subject matter is unable to be delivered within the time limit agreed upon due to the fault of the buyer bear the risk of damage or loss in respect of the subject matter from the date fixed for delivery.
Article 144
Unless otherwise agreed by the panties, when a subject matter which has been dispatched for transmission by the carrier is sold by the seller, the risk of damage or loss in respect passes to the buyer at the moment the contract takes effect.
Article 145
Where there is no place of delivery is provided in the contract or the provision is ambiguous and the subject matter need to be carried according to Item 1 of Paragraph 2 of Article 141 of this Law, the risk of damage or loss in respect of the subject matter shall pass to the buyer from the time the subject matter was handed carrier by the seller.
Article 146
In case the subject matter is placed at the place of delivery as agreed upon or according to Item 2 of Article 141 of this Law, while the buyer commits a breach of contract by failing to take of damage or loss in respect of the subject matter shall pass to the buyer from the date it breaches the contract.
Article 147
The fact that the seller has not delivered the documents and materials in respect of the subject matter as the passage of the risk of damage or loss to the subject matter.
Article 148
A(here the purpose of the contract fails to be achieved due to the unconformity of the quality of the subject flatter, the buyer may refuse to accept the subject mater or revoke the contract In case the buyer has refused to take delivery or revoked the contract, the risk of damage or loss to the subject matter shall be born by the seller.
Article 149
The fact that the risk of damage or loss to the subject matter is borne by the buyer does not impair its right to request the seller to bear the liability for breach of contract if the seller's performance of its obligation is not in accordance with the agreement between the parties.
Article 150
Unless otherwise provided by law, the seller shall guarantee the buyer being free from any claim of a third party.
Article 151
Where the buyer knows or should have known that a third party has a right in the subject matter at the time the contract is concluded, the seller shall not bear the liability as provided in Article 150 of this Law.
Article 152
Where the buyer has specific evidence to prove that the third party may claim a right in the subject matter, he is entitled to suspend payment of relevant price unless the seller has offered proper guaranty.
Article 153
The seller shall delivery a subject matter according to the quality requirement agreed upon. If the seller has supplied an explanation on the quality of the subject matter, the subject matter delivered shall be in conformity with the quality requirement noted in the explanation.
Article 154
If the quality requirement of the subject matter 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, Item 1 of Article 62 of this Law shall apply.
Article 155
Where the subject matter delivered by the seller does not meet the quality requirement, the buyer is entitled to request the seller to bear. liability for breach of the contract according to Article 111 of this Law.
Article 156
The seller shall deliver the subject matter according to the manner of package agreed upon. If the manner of package 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 subject matter shall be packed in a usual manner; or where there is no such a usual manner, in a manner appropriate for the protection of the subject matter.
Article 156
Where the seller is not able to perform its duty of transferring part of the right that is owned by another person in the subject matter, the buyer may request to reduce the price or discharge the contract.
Article 157
The buyer after it takes delivery shall inspect the subject matter within the time limit for inspection as agreed upon. If no time limit is agreed upon, in due time.
Article 158
Where the parties has agreed upon time limit for inspection, the buyer shall notify the seller of the unconformity of the quantity or quality of the subject matter within the time limit for inspection. In case the buyer is reluctant to do so, the subject matter shall be deemed as in conformity.
Where no time limit for inspection is agreed upon, the buyer shall notify the seller within reasonable time after he has found or ought to have found the unconformity of the quantity or quality of the subject matter. In case the buyer fails to notify the seller within reasonable time or 2 years from the date of taking delivery, the quantity or quality of the subject matter shall be deemed as in conformity. However, where a period of quality guaranty for the subject matter has been set, the period of quality guaranty instead of the period of 2 years shall apply.
Where the seller knows or ought to have known the unconformity in the subject matter, the proceeding two Items on the restriction of time limit for notification shall not be binding on the buyer.
Article 159
The buyer shall pay for the price as agreed upon. If the price is not provided in the contract or the provision is ambiguous, Article 61 and Item 2 of Article 62 of this Law shall apply.
Article 160
The buyer shall pay for the price at a place agreed upon. If the place for payment 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 buyer shall pay at the seller's place of business. However, if the parties have agreed that the payment shall be made only after the subject matter or the documents for taking delivery of the subject matter is delivered, the price shall be paid at the place where the subject matter or the documents for taking delivery is delivered.
Article 161
The buyer shall pay for the price at the time agreed upon. If the time for payment 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 buyer shall pay for the price at the same time it accepts the subject matter or the documents for taking delivery of the subject matter.
Article 162
If the seller delivers a quantity of subject matter greater than that provided for in the contract, the buyer may take delivery or refuse to take delivery of the excess quantity. In case of taking delivery of the excess quantity, the buyer shall pay for its price according to the price fixed in the original contract. In case the buyer refuses to take delivery of the excess quantity, shall inform the seller in due time.
Article 163
Profit accrued from the subject matter before the delivery shall belong to the seller, and that after delivery shall belong to the buyer.
Article 164
Where a contract is discharged as the main article of the subject matter lacks conformity with the agreement, the validity of discharge of the contract extends to the subordinated article of the subject matter. Where a contract is to be discharged as the subordinated article of the subject matter lacks conformity, the validity of discharge does not extend to the main article.
Article 165
Where the subject matter is composed of several articles and one of them lacks conformity with the agreement, the buyer may discharge that article. However, if the value of the subject matter is obviously impaired in case that article is separated from the other articles, the buyer may discharge the contract with respect to all the articles.
Article 166
Where the seller delivers the subject matter in batches, and one batch of them is undelivered or the delivery lacks conformity with the agreement and thus this batch does not meet the purpose of the contract, the buyer may discharge this batch of subject matter.
Where one batch of the subject matter fails to be delivered by the seller or the delivery lacks conformity with the agreement, and thus the other batches of the subject undelivered do not meet the purpose of the contract, the buyer therefore may discharge this batch and the batches undelivered.
Where one batch of the subject matter is discharged by the buyer and this batch is interdependent with the other batches, the buyer may discharge the batches of subject matter both delivered or undelivered.
Article 167
Where the nonpayment overdue for the buyer to a payment by installments has amounted to one fifth of the total price, the seller may request the buyer to pay the total price or discharge the contract.
Where the seller discharges the con tract, he may request the buyer to pay for its use of the subject matter.
Article 168
The parties to a sale by sample shall seal up the sample and they may also make an explanation on the sample. The subject matter delivered by the seller shall be of the same quality to the sample.
Article 169
Where the buyer to a sale by sample does not know there. is a concealed defect in the sample, even the subject matter delivered is identical to the sample, it shall be in conformity with the normal standard of the same kind of matters.
Article 170
The parties to a sale on approval may agree upon a period for approval of the subject matter. If the period for approval 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 period shall be determined by the seller.
Article 171
The buyer to a sale on approval may purchase or refuse to purchase the subject matter within the period of approval. Its silence as to whether to purchase it or not at the expiration of the period is deemed as an indication to purchase.
Article 172
The rights and duties of the parties to a sale by bid invitation and biding and the procedures for bid invitation and biding shall be subject to related laws and administrative regulations.
Article 173
The rights and duties of the parties to an auction and the procedure of auction shall be subject to related laws and administrative regulations.
Article 174
Where other non-gratuitous contracts are provided in law, those provisions shall apply. Otherwise, the provisions on sales contracts shall be followed.
Article 175
The provisions relating to sales contracts shall be followed as to a barter trade agreed upon between the parties in which the ownership of the subject matters is transferred.
CHAPTER X
CONTRACTS FOR SUPPLY & USE OF WATER, ELECTRICITY, GAS & HEAT
Article 176
A contract for the supply and use of electricity is a contract through which the electricity supplier supplies electricity to the electricity user and the electricity user pays for the price.
Article 177
Contents of the contract for supply and use of electricity shall contain clauses on the manner, quality and time of the electricity supplied, the capacity, place, character, and method for calculation of the electricity used, the way of settling the electricity price and fee, the responsibilities for maintaining the electricity supply and use equipment etc.
Article 178
The place of performance of the contract for supply and use of electricity shall be agreed upon between the parties. Where there is no agreement or the agreement is ambiguous, the place of performance shall be the boundary of the property rights of the electricity supply equipment.
Article 179
The electricity supplier must supply electricity in a safe manner in accordance with the quality standard for the electricity supplied stipulated by the State and the agreement between the parties. Where the electricity supplier fails to supply electricity in a safe manner in accordance with the electricity supply standards stipulated by the State and the agreement between the parties, it shall compensate the electricity user for the losses caused thereby.
Article 180
Where due to planned or temporary inspection or repair of electricity supply equipment, a lawful restriction on the supply of electricity, or illegal use of electricity by the electricity user etc. the electricity supplier needs to suspend the supply of electricity, it shall notify the electricity user in advance according to the relevant State stipulations. In case the electricity supplier suspends the electricity supply without notifying the electricity user in advance, the electricity supplier shall compensate the electricity user for the losses caused thereby.
Article 181
In case the electricity supplied is cut off due to a natural disaster etc., the electricity supplier shall do rush repair according to relative stipulations of the State. If the repair is not done in due time and thus causes loss to the electricity user, the electricity supplier shall bear the liability of compensation.
Article 182
The electricity user shall pay the electricity fee according to relative stipulations of the State and the agreement between the parties. Where the electricity user fails to pay the overdue electricity fee, it shall pay the liquidated damages as agreed upon. In case the electricity user fails to pay the electricity fee of the liquidated damages after summon exhortation, the electricity supplier may suspend the supply of electricity according to procedures stipulated by the State.
Article 183
The user must use the electricity safely in accordance with the relative stipulations of the State and the agreement between the parties. In case it fails to do so and thus causes loss to the electricity supplier it shall be liable for compensation.
Article 184
Contracts for the supply and use of water, gas and heat shall be handled with reference to the provisions on the contract for the supply and use of electricity.
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