BIZCHINA / Company laws
Contract Law of the People's Republic of China
Updated: 2006-04-17 10:00
Article 116 Where the parties to a contract agree on both breach of
contract damages and a deposit, when one party violates the contract, the
other party may choose to apply the breach of contract damages clause or
the deposit clause.
Article 117 In case that a contract is not able to be performed because
of force majeure, the liabilities shall be exempted in part or wholly in
light of the effects of force majeure, except as otherwise stipulated by
law. If the force majeure occurs after one party has delayed in
performance, the liability may not be exempted.
Force majeure as referred to in this Law means the objective
circumstances that are unforeseeable, unavoidable and insurmountable.
Article 118 One party to a contact that is not able to perform the
contract because of force majeure shall make a notice to the other party
promptly so as to reduce the probable losses to the other party and
provide evidence within a reasonable time limit.
Article 119 After one party violates a contract, the other party shall
take proper measures to prevent from the enlargement of losses; if the
other party fails to take proper measures so that the losses are
enlarged, it may not claim any compensation as to the enlarged losses.
The reasonable expenses paid by the party to prevent from the enlargement
of losses shall be borne by the party in breach.
Article 120 In case that both parties violate a contract, they shall bear
the liabilities respectively.
Article 121 One party that violates the contract because of a third party
shall be liable for the breach of contract to the other party.
The disputes between the said party and the third party shall be settled
according to law or their agreement.
Article 122 In case that the breach of contract by one party infringes
upon the other party's personal or property rights, the aggrieved party
shall be entitled to choose to claim the assumption by the violating and
infringing party of liabilities for breach of contract according to this
Law, or to claim the assumption by the violating and infringing party of
liabilities for infringement according to other laws.
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