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Regulations of Shenzhen Special Economic Zone On Standard Contract

Regulations of Shenzhen Special Economic Zone On Standard Contract

 (Adopted at the twenty-fourth meeting of the Second Session of Standing Committee of Shenzhen Municipal People' s Congress on July 2, 1998)


Chapter  General Provision 

Article 1 These regulations are formulated in order to maintain the economic order of Shenzhen Special Economic Zone (hereinafter referred to as "Special Zone" ) and prevent abusing clauses in standard contract to obtain the unjust interests.

Article 2 A "Standard Contract" in these regulations means a contract that concluded by one of the parties (the users) and an unparticular person with the contract wording drafted in advance.

 The Specific Counseling Clause, which revised on the agreement by both parties to the contract, shall be adopted in prior to settle the disputes concerned with standard contract.

Article 3 These regulations shall be adopted to the standard contracts concluded or performed in Special Zone, unless provided in laws or administrative regulations.

Article 4 The conclusion and performance of the standard contract shall abide by the principles of fairness, honesty and credibility, making compensation for equal value.

Article 5 Where there are not less than two kinds of interpretation to a clause of the standard contract, an interpretation favorable to the counterpart shall be preferred. 


        Chapter    Conclusion of Standard Contract 

Article 6 The standard contract shall be concluded in written form, but the special contract forms such as the contracts of transportation, postal telegram and  lottery ticket raffle ticket approved to issue by the state is excluded. The written forms mean the forms which is able to show the described content visibly, such as a written contractual agreement, faxes and Internet.

If the certificates cannot contain all the terms of the standard contract when the parties establish contractual relationship in form of simple certificates (ticket, electronic purchasing card, etc.), the users shall separately offer the explanatory documents that including all the terms besides the certificates. But if there is difficulty to fulfill, the users are liable to request the other party to note the exemption or restriction of their liability in reasonable ways, and shall illustrate the containing of the term according to the requirement of the counterpart.

Article 7 A standard contract concluded in written shall contain the following main clauses:

(1) Title or name and domicile of the parties;

(2) Varieties of the contract object;

(3) Quantity and quality;

(4) Price or remuneration; 

(5) Time limit, place and the method of the performance;

(6) Methods to settle disputes and liability for breach of contract;

(7) When and where the contract is concluded;

(8) Other terms shall be agreed by the parties.

Article 8 If it is uncertain of the provisions of the main terms on quality quantity and price etc , the parties may agree upon the supplementary terms.; if no agreement is to be reached, the terms shall be determined according to the context of the relevant contract clauses or by transaction practices; if it still fails to be determined, provisions of relevant laws and regulations or the unite standards stipulated by the relevant departments or trade associations shall be adopted.

Article 9 The contract is established when it is signed by the parties unless examination and approval is needed according to law.

Article 10 The service promise made in public by the user in written or through mass media without contract form shall be part of the contract automatically. But the liability that the user imposed to the counterpart in the service promise shall not be part of the contract without the written consent of the counterpart.

The user shall be liable for breach of contract if he disobeys the service promise

Article 11 Written introduction or illustration of the products and services offered by the user beyond the standard contract shall be part of the standard contract, but advisement and propaganda is not included.

Article 12 The user shall not refuse to conclude standard contract with any other qualified party.

Article 13 Where there are strict requirement to qualification of the counterpart according to laws or regulations, the user is liable to introduce the specific qualification requirement to the counterpart; and the counterpart is liable to submit the certification about identity, age etc.

Article 14 The administrative offices, trade associations or chambers of commerce may draft directory model text as the reference to the parties, but shall not compel the parties to use the contract, unless provided in laws and regulations.


Chapter    Validity of Standard Contracts

 Article 15 When the contract is concluded, the parties shall perform their  obligations thoroughly according to the terms of the contract. Neither party shall unilaterally modify or rescind the contract.

 Article 16 A standard contract with any of following circumstances shall be null and void:

(1) Without handling the procedure of approval and registration in violation of laws and regulations;

(2) Concluded by a person of no civil capacity for civil conduct;

(3) Concluded by a person with limited capacity for civil conduct, which is not appropriate to his age and intellect;

    (4) Concluded by a person with no power of agency in other person' s name and without retroactive recognization by the principal;

    (5) Concluded through the use of fraud or coercion.

Article 17 It shall be null and void if the following clauses are found in a standard contract:

(1) Exempting the user from bearing the basic obligations of the contract; but except in case of force majesture;

(2) Exempting or restricting the user' s liability of compensation which he shall bear in case of breaching the contract with fault;

(3) Exempting or restricting the user' s legal responsibility he shall undertake caused by his fault which results in death or personal injury of the other party;

(4) Stipulating that the counterpart has no right to modify or rescind the contract;

(5) Stipulating that the counterpart has no right to refuse performing the contract when the price of the products or services offered by the user is at an unreasonable substantial rise;

(6) Stipulating that the counterpart' s liability which shall be borne for breach of contract is not equal to that of the user' s;

(7) Prohibiting or restricting the counterpart from enforcing the right of lien;

(8) Exempting the counterpart' s right to claim when he bears damages caused by the products or services supplied by the user;

(9) Exempting or restricting the user' s liability of guarantee or repair to his products or service; or shortening the legal period of guarantee that the user shall undertake to his product;

(10) Stipulating that only the user has right to interpret the contract;

(11) Transferring the burden of proof which shall be borne by the user to the counterpart;

(12) The clause, unknown to the counterpart resulting from the user' s failing to perform his liability of prompting in violation of Article 6(2), that exempts or restricts the use' s responsibility, the parties do not note the other party in concluding violating item 2, clause 6 of the regulation, and the terms that is unknown to the other party exempt or restrict  the parties' (users' ) responsibility;

(13) Stipulating that the counterpart has no right to bring their disputes to the people' s court or an arbitration institution.

Article 18 A clause in a standard contract with any of the following circumstances shall be revoked:

(1) Requesting the counterpart to perform the contractual obligations unconditionally in violation the principle of fairness;

(2) Stipulating that the counterpart shall pay extra fixed charges in addition to the service fees when he takes advantage of the service the user offered;

(3) Permitting the users to delay performance of the contract in an uncertain period;

(4) Stipulating that the counterpart shall pay the user breach of contract damages even if he modifies or rescinds the contract according to law;

(5) Stipulating that the counterpart' s liability for compensation may exceed the actual damages when the contract is rescinded;

(6) Permitting the user to transfer his rights or obligations to a third party unilaterally;

(7) Stipulating that the counterpart shall not dissent to the products or services offered by the user;

(8) Stipulating that the user may be exempt form the liability of informing the counterpart when there is emergency that is unfavorable to the counterpart.

Article 19 The parties to the contract may apply to the people' s court or an arbitration institution for confirming the invalidity of the standard contract within one year since the establishment of the contract, and shall state corresponding reason while applying.

   Article 20 If one party deems that there is revocable or invalid clause in the contract, he may request the people' s court or an arbitration institution in written to modify or revoke it, and shall state corresponding reason while applying.

Article 21 An invalid standard contract shall be null and void ever from the very beginning. If part of a standard contract is revoked or null and void without affecting the validity of the other parts, the other parts shall still be valid.

If a standard contract is null and void, it shall not affect the validity of the dispute settlement clause in the contract.

Article 22 The property acquired as a result of the performance of a contract shall be returned after the standard contract is confirmed to be null and void. The party at fault shall compensate the other party for actual losses incurred as a result thereform.


    Chapter   Performance of the Standard Contracts

       and Liability for Breach of Contracts

   Article 23  The parties may agree in the standard contract that a third party performs the obligations to the counterpart .The user shall be liable to the losses caused by the third party performing the contract inadequately. If the third party refuses to perform, the user shall perform the contract.

Article 24 One party may suspend its performance of the contract if the other party who shall render its performance first, according to the terms of a contract or trade usage, has not rendered its performance.  

Article 25 The users shall inform the other party on time if they, in order to avoid causing loss to the other party, fail to perform the contract because of technical questions.

The parties shall, excluding force majeure, inform the other party in a reasonable way and request the other party to modify relevant terms, if performance of the former contract is dramatically unfair to the users, which results from the great changes of the objective circumstances that are unforeseeable, unavoidable or insurmountable by the users. And if the other party confuses to modify the contract, the users may terminate performance of the contract.

   Article 26 The parties may agree on the breach of contract damages one should bear in light of the breach.

Liquidated damages shall be considered as compensation for losses resulting form the breach of contract. The parties may request the people' s court or an arbitration institution to increase or reduce the liquidated damages, if the liquidated damages are excessively higher or lower than the losses caused by breach of the contract. The parties may request the people' s court or an arbitration institution to make a discretionary reduction, if there is no losses as a result and it is obviously unreasonable to pay the breach of contract damages according to the terms of a contract.

Article 27 Deposit may be agreed in the standard contract, but the amount of the deposit shall not exceed 20 percent of the montary amount of contract object.


Chapter    Supplementary Provisions

Article 28 Article 17 (2) of these regulations shall not be adopted to the postal telegram contract and lottery contract ratified by the State.

    Article 29 These regulations shall take effect as the day of October 1,1998.



                                             (Translated by Xu Lingling)

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