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Performance and remedies of contract according to China Contract Law- Conclusion of a contract by mutual assent of offer and acceptance

Time:2014-03-13 Hit:898

Performance obligations and remedies of breach of a contract according to China Contract Law- Conclusion of a contract by mutual consent of offer and acceptance

Author: shanghai lawyer

   The offer shall be clear and sufficient enough for determining the rights and obligations of parties. A proposal to supply goods or services of a specific price in an advertisement or by the display of products is usually recognized as an offer. If the content of an advertisement does not meet the requirement of an offer, it will be presumed to be an invention of an offer.

   If the offerer's unconditional consent to all terms and conditions specified in the offer is acceptance and results in a contract binding at law, an offerer's power of acceptance may be terminated by revocation by the offeror, lapse of time, rejection by the offerer, or counteroffer. A conditional acceptance is not an acceptance, rather a counter offer. An acceptance may be oral, written or behavioral.

Performance of the contract:

  When a contract is formed, it is legally binding. Article 8 of China Contract Law specified that when a contract is established in accordance with the law, it shall be legally binding on the parties. Article 8 further provides that the parties shall perform their perspective obligations in accordance with the terms of their contract, and neither party may unilaterally modify or rescind the contract without the other party's consent. It is stressed under article 8 that the contract established according to law shall be under the protection of the law. A contract ends when the parties have performed their respective obligations satisfactorily. For a contract to be fully performed, performance must have been completed by both parties and not merely by one of them.

  The proper performance requires contracting parties to perform contract in the following manners: to deliver subject matters as specified in the contract; to deliver the agreed amount and quality; to pay agreed price; to perform within agreed time limit; to perform in the place specified in contract; to perform in the manner as specified in the contract. Besides, the parties shall abide by the principle of good faith, and perform such obligations as notification, assistance and confidentiality in light of the nature and purpose of the contract, and according to the course of dealing.

   If the performance of the party required to perform first does not conform to the specification of the contract, the other party may refuse such party's demand for corresponding performance. Though one party is obliged to perform first, such a party may suspend performance under certain circumstances.

Remedies for breach of contract:

    According to China Contract Law, there are three ways of violating a contract by one party: by repudiating its obligations expressly, by acting in a way that makes the performance impossible and by failing to perform its obligations.

     Remedies for breach of contract include damages, specific performance, and discharge of the contract. The damages may be classified as liquidated damages, direct and indirect damages, pre-conditions for an award of damages. Specific performance may not be available when the performance can not be rendered in law or fact, or the subject matter of the obligation is not in fit for specific performance, or the creditor fails to demand performance within a reasonable time limit.

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