Anyone having questions re China business law?
Post 1 of 167
Ladies and Gentlemen,
I'd love to take your questions regarding China's business law. Free of charge![[em1]](http://img.alibaba.com/images/eng/style/icon/emoticons_smile.gif){kind=icon}
. But before raising your questions, pls consider the following:
1:My practice primarily focuses on investment, corporate affairs and intellectual property rights, also do trade law, though not as extensively as the foregoing. I'll try to answer your questions in, but not neccessarilly limited to, these areas.
2:Given my daily routines, please forgive me if I could not be able to take ALL your questions and reply soon. But I'll try my utmost.
3:If you think your question is business-sensitive or too complex to sum up in a couple of lines, you may wish to contact me via the Trademanager or leave me a message containing your contact info, or find me at my blog site of http://prcbusinesslaw.blogspot.com/ , so that we can further discuss in private.
4:Before you ask someone fo/r legal advice, please first make sure he or she is a licensed lawyer and is legally competent to practise the law concerning your dispute. As a Chinese lawyer, my advice is primarily focused on disputes relating to China.
5:Last but not the least, given the nature of this forum and the cyberspace, any of my replies is based on the truthfulness and accuracy of your representations and is not intended to be or to substitute any formal legal opinions. Ladies and gentlemen, here we go!
29 May 2006 04:28
Post 2 of 167
Replying to [lawyer_He]:
You are very kind Mr Lawyer He.
1. What is the remedy in China for breach of a fundamental condition of a commercial contract? Or more to the point, how enforceable is the remedy?
2. Any Trade Practices law yet ... ie "unconscionable conduct", for example, reliance on misrepresentation to enter into a contract resulting in loss and damage?
Many thanks.
You are very kind Mr Lawyer He.
1. What is the remedy in China for breach of a fundamental condition of a commercial contract? Or more to the point, how enforceable is the remedy?
2. Any Trade Practices law yet ... ie "unconscionable conduct", for example, reliance on misrepresentation to enter into a contract resulting in loss and damage?
Many thanks.
29 May 2006 05:45
![[em17]](http://img.alibaba.com/images/eng/style/icon/emoticons_shake_hands.gif){kind=icon}
Post 4 of 167
Replying to [Aussie]:
Thanks for your questions.
1.Breach of a fundamental condition of a commericial contract normally gives the aggrieved party the right to terminate the contract, in addition to the entitlement of damages, specific performance, as appropriate, and/or other remedial measures which are available in all sorts of breach of contracts. These measures, when granted through effective judgements, are enforceable either on a voluntary basis or on court orders in the case of default by the judgement debtor.
2. Civil and commercial contracts in China are both governed by the contract laws and the Civil Codes. There is no Chinese equivalent to the Uniform Commercial Code in US. Trade practices specific to a business area are also governed by laws and acts specific thereto. The examples you gave are addressed under Chinese law on fraud. Reliance on misrepresentation to enter into a commerical contract usually gives the representee right to avoid the contract and to claim damages. If the representee is an ordinary consumer of goods for non-commercial use, he or she is entilted to a double refund of the price under China's consumer rights protection law.
Thanks for your questions.
1.Breach of a fundamental condition of a commericial contract normally gives the aggrieved party the right to terminate the contract, in addition to the entitlement of damages, specific performance, as appropriate, and/or other remedial measures which are available in all sorts of breach of contracts. These measures, when granted through effective judgements, are enforceable either on a voluntary basis or on court orders in the case of default by the judgement debtor.
2. Civil and commercial contracts in China are both governed by the contract laws and the Civil Codes. There is no Chinese equivalent to the Uniform Commercial Code in US. Trade practices specific to a business area are also governed by laws and acts specific thereto. The examples you gave are addressed under Chinese law on fraud. Reliance on misrepresentation to enter into a commerical contract usually gives the representee right to avoid the contract and to claim damages. If the representee is an ordinary consumer of goods for non-commercial use, he or she is entilted to a double refund of the price under China's consumer rights protection law.
30 May 2006 09:38
Post 5 of 167
Thanks indeed Lawyer He.
It helps serious traders to know, as you very clearly outlined, that the principles of Chinese mainland contract law and remedies are now basically the same as in the west.
If I may stretch our friendship:
1. The above seems to indicate that a Chinese Court will "construct" the terms of a contract from a trail of correspondence (offers, representations, acceptance, etc, between the parties) in a situation where no formal contract (in the usual sense) was drawn, including correspondence by email, same as in the west?
2. Are Chinese civil law Judges bound by case law (precedents) same as in most western jurisdictions?
Kind regards
It helps serious traders to know, as you very clearly outlined, that the principles of Chinese mainland contract law and remedies are now basically the same as in the west.
If I may stretch our friendship:
1. The above seems to indicate that a Chinese Court will "construct" the terms of a contract from a trail of correspondence (offers, representations, acceptance, etc, between the parties) in a situation where no formal contract (in the usual sense) was drawn, including correspondence by email, same as in the west?
2. Are Chinese civil law Judges bound by case law (precedents) same as in most western jurisdictions?
Kind regards
31 May 2006 01:56
Post 6 of 167
Replying to [Aussie]:My answers are:
1.Yes. Generally speaking, a contract may not neccessarily be in writing or take the form of a formal agreement to exist under Chinese law.
2.No. Precedents are not legally binding upon judges, but in practice, decisions of the supreme court judges are universally respected by and highly pursuasive for judges of lower courts and lawyers as well.
1.Yes. Generally speaking, a contract may not neccessarily be in writing or take the form of a formal agreement to exist under Chinese law.
2.No. Precedents are not legally binding upon judges, but in practice, decisions of the supreme court judges are universally respected by and highly pursuasive for judges of lower courts and lawyers as well.
31 May 2006 10:00
Post 7 of 167
Dear Lawyer He, the broad education is most appreciated.
Say, foreign buyer F enters into contract with mainland Chinese manufactuer M.
A dispute ensures where F seeks to claim against M.
1. Does F have standing to file claim against M in a mainland Chinese Court?
2. Does the Chinese legal system promote "mediation" in lieu of trial (similar to recent trends in western courts to make mediation of filed disputes almost compulsory)?
3. Would there have been any merit in F inserting in the contract to the effect "The law of China applies in respect of this agreement"?
Or, is such implied into the agreement?
Or, should the law of a specific Province in China be nominated in the agreement in order to pre-establish where any dispute will be resolved (ie "The law of XX Province applies to this agreement")?
Many thanks again.
Say, foreign buyer F enters into contract with mainland Chinese manufactuer M.
A dispute ensures where F seeks to claim against M.
1. Does F have standing to file claim against M in a mainland Chinese Court?
2. Does the Chinese legal system promote "mediation" in lieu of trial (similar to recent trends in western courts to make mediation of filed disputes almost compulsory)?
3. Would there have been any merit in F inserting in the contract to the effect "The law of China applies in respect of this agreement"?
Or, is such implied into the agreement?
Or, should the law of a specific Province in China be nominated in the agreement in order to pre-establish where any dispute will be resolved (ie "The law of XX Province applies to this agreement")?
Many thanks again.
31 May 2006 11:09
Post 8 of 167
Replying to [lawyer_He]:I would like to sue someone in Shanghai China, can you take the case?
31 May 2006 13:18
Post 9 of 167
Replying to [Vivid]: Yes, as a Chinese licensed lawyer, I can represent you in any legal proceedings in Shanghai if you so choose. But whether you can, and should, sue in Shanghai depend on an evaluation of your case. You may give me a description of your case so that I can make a preliminary evaluation for you.
01 Jun 2006 08:01
Post 10 of 167
Replying to [Aussie]:I'll give answers in a point-to-point format.
1. Yes,unless a)F's country imposes restrictions on Chinese citizens' rights to sue in F's country; or b) the contract contains an arbitration clause.
2. Yes. Mediation and conciliation are always encouraged in China's civil law, but not compulsory. The parties to a civil proceeding may settle through mediation or conciliation at any point of time between the inception of the suit and the actual enforcement of the judgement.
3. Certainly F can do so. But whether he should do so is always a case-specific issue, with a variety of factors needed to consider, such as the nature of the contracts, main venue of performance, possible costs, etc. In the absence of an express choice of forum in the contract, a Chinese court may apply the law of the country that has closest connection to the contract as the proper law governing this contract. But if F's country is, like China, a memeber of the United Nations' Convention on International Sale of Goods(CISG), CISG generally will apply unless expressly excluded in the contract.
4.Unlike the US, where laws vary by state, China is of a uniform legal system and there is no need to refer to any province in choosing the law. However, in certain contracts, the parties may agree on the court of a specific place to take and hear their dispute.
1. Yes,unless a)F's country imposes restrictions on Chinese citizens' rights to sue in F's country; or b) the contract contains an arbitration clause.
2. Yes. Mediation and conciliation are always encouraged in China's civil law, but not compulsory. The parties to a civil proceeding may settle through mediation or conciliation at any point of time between the inception of the suit and the actual enforcement of the judgement.
3. Certainly F can do so. But whether he should do so is always a case-specific issue, with a variety of factors needed to consider, such as the nature of the contracts, main venue of performance, possible costs, etc. In the absence of an express choice of forum in the contract, a Chinese court may apply the law of the country that has closest connection to the contract as the proper law governing this contract. But if F's country is, like China, a memeber of the United Nations' Convention on International Sale of Goods(CISG), CISG generally will apply unless expressly excluded in the contract.
4.Unlike the US, where laws vary by state, China is of a uniform legal system and there is no need to refer to any province in choosing the law. However, in certain contracts, the parties may agree on the court of a specific place to take and hear their dispute.
01 Jun 2006 08:38
Post 11 of 167
Replying to [lawyer_He]:
Lawyer He, I should say thatyour expertise will and can help us all to begin to grasp of the complexities of international trade law.
As an amateur in this field, I only have one question;
Let's say I received defected consignment from Chinese Seller and the contract value (for that consignment) is around USD 15,000 (fifteen thousand).
Do you think (considering lawyer fee, court fee and other expenses we have to endure during the lawsuit) it is worth it to bring the case to China Court?
And let's say (after I spent so much money during the trial) the court decided that this Chinese Seller breached the contract and punish them to pay certain compensation but this Seller does not have any money left.What will the court do? And also more importantly, what will I (as the Buyer who lodged the claim) will get ?
Lawyer He, I should say thatyour expertise will and can help us all to begin to grasp of the complexities of international trade law.
As an amateur in this field, I only have one question;
Let's say I received defected consignment from Chinese Seller and the contract value (for that consignment) is around USD 15,000 (fifteen thousand).
Do you think (considering lawyer fee, court fee and other expenses we have to endure during the lawsuit) it is worth it to bring the case to China Court?
And let's say (after I spent so much money during the trial) the court decided that this Chinese Seller breached the contract and punish them to pay certain compensation but this Seller does not have any money left.What will the court do? And also more importantly, what will I (as the Buyer who lodged the claim) will get ?
01 Jun 2006 11:38