Agency Law in China

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CONTRACT OF AGENCY IN CHINA

9.1 INTRODUCTION
Before the enactment of a unified contract law in 1999, contract law in China was primarily contained in three separate laws, each dealing with a particular area of the law of contract. The three pillars of Chinese contract law were the Economic Contract Law (hereafter: ECL) of 1981 applicable to domestic ‘economic’ contracts, the Foreign Economic Contract Law (hereafter: FECL) of 1985 applicable to ‘economic’ contracts between domestic and foreign parties, and the Technology Contract Law (hereafter: TCL) of 1987. The coexistence of these three laws resulted in a fragmentary approach to contract law and meant that the law of contract was piecemeal, often inconsistent and at times incomplete. With the entry into force of the CCL in 1999, the ECL, FECL and TCL were repealed. Article 1 CCL embodies the purpose of the new, uniform law on contract law: ‘This law is formulated in order to protect the lawful rights and interests of contract parties, to safeguard social and economic order, and to promote socialist modernization’. This new contract law was needed to support China’s transition from a centrally planned economy to a socialist market economy and to facilitate economic growth. The CCL aims to facilitate international economic, trade and technological cooperation by incorporating rules consistent with international practices into Chinese law. This reflects the ‘subtle and incremental shift in recent years to a model based more on international practice and international treaties’ that can be seen in the reform of Chinese law. In the CCL, this can be observed in many provisions, which were clearly influenced by international instruments such as the CISG and the Unidroit Principles of International Commercial Contracts (UPICC). The CCL also aims to provide contracting parties with more protection, and provide them with ‘more freedom and flexibility in their contractual relations’, while at the same time providing ‘legal means and bases for the governmental regulation of contracts so as to protect the interests of the state and the public’. The CCL comprises two main parts: General Provisions and Specific Provisions. The General Provisions lay down rules that are applicable to all contracts, such as the general principles of contract law, rules on formation of contracts, validity of contracts, performance of contracts, amendment and assignment of contracts, discharge of contractual rights and obligations, liability for breach of contract, provisions concerning the relationship between the CCL and other laws, contract interpretation and choice of law. The Specific Provisions contain 15 chapters dealing with specific types of contracts, such as contracts for sales, donation, lease, financial lease, work, supply of electricity, gas and water, loan, technology, storage, warehousing, carriage, construction projects, commission, brokerage and intermediation. Where a contract falls within the categorized, nominate contracts, the relevant rules of the Specific Provisions for that type of contract will apply. Non-categorized, innominate contracts are governed by the General Provisions. According to Article 124 CCL, provisions concerning a nominate contract that is similar to the non-categorized, innominate contract may be applied analogously. The CCL is not the only source of legislative rules on contract law. Rules of Chinese contract law can also be found in the General Principles of Civil Law (GPCL) of 1986, which contains general rules for all civil juristic acts that are also applicable to contracts. The GPCL contains provisions on fundamental principles, natural persons, legal persons, civil juristic acts and agency, civil rights, civil liability, prescription, application of law in civil relations with foreigners and supplementary provisions. A number of other laws dealing with specific topics are also relevant to contract law such as advertisement law, agriculture law,...
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