Contract Formation under Chinese Law – Notes for Chinese and International Companies

Published on 2021-02-05

Recently, we became aware of certain issues pertaining to contract formation under Chinese law. Such issues would arise by reason of time constraints (such as the limited amount of time available to discharge cargo).

 Contract Formation under Chinese Law – Notes for Chinese and International Companies

The parties would run out of time to consider all the terms contained in the standard contract and would proceed with only the key commercial terms having been agreed (such as price, contract period and others). The question in this situation was whether there was a binding contract and, if so, on what terms.

Another scenario would occur where the parties had agreed all the terms of a contract but, given the time shortage, failed to complete their internal approval procedure for signing/stamping the contract. The question in this case was: without the required signature/stamp, were the parties bound by the terms agreed initially?

To clarify the legal position and minimise the risk of potential disputes, it is helpful to understand Chinese law on contract formation and its practical application. 

Click here to learn more

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