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GENERAL PRINCIPLES OF THE CIVIL LAW

Category  BASIC CIVIL LAW Organ of Promulgation  The National People's Congress Status of Effect  In Force
Date of Promulgation  1986-04-12 Effective Date  1987-01-01  

General Principles of the Civil Law of the People's Republic of China



Contents
Chapter I  Basic Principles
Chapter II  Citizen (Natural Person)
Chapter III  Legal Persons
Chapter IV  Civil Juristic Acts and Agency
Chapter V  Civil Rights
Chapter VI  Civil Liability
Chapter VII  Limitation of Action
Chapter VIII  Application of Law in Civil Relations with Foreigners
Chapter IX  Supplementary provisions
Note:

(Adopted at the Fourth Session of the Sixth National People's Congress,  

promulgated by Order No.37 of the President of the People's Republic of
China on April 12, 1986, and effective as of January 1, 1987)
Contents

    Chapter I    Basic Principles

    Chapter II   Citizen (Natural Person)

        Section 1  Capacity for Civil Rights and Capacity for Civil Conduct

        Section 2  Guardianship

        Section 3  Declarations of Missing Persons and Death

        Section 4  Individual Businesses and Leaseholding Farm Households

        Section 5  Individual Partnership

    Chapter III  Legal Persons

        Section 1  General Stipulations

        Section 2  Enterprise as Legal Person

        Section 3  Official Organ, Institution and Social Organization as

                   Legal Persons

        Section 4  Economic Association

    Chapter IV  Civil Juristic Acts and Agency

        Scction 1  Civil Juristic Acts

        Section 2  Agency

    Chapter V  Civil Rights

        Section 1  Property Ownership and Related Property Rights

        Section 2  Creditors' Rights

        Section 3  Intellectual Property Rights

        Section 4  Personal Rights

    Chapter VI  Civil Liability

        Section 1  General Stipulations

        Section 2  Civil Liability for Breach of Contract

        Section 3  Civil Liability for Infringement of Rights

        Section 4  Methods of Bearing Civil Liability

    Chapter VII  Limitation of Action

    Chapter VIII  Application of Law in Civil Relations with Foreigners

    Chapter IX  Supplementary Provisions

Chapter I  Basic Principles

    Article 1  This Law is formulated in accordance with the Constitution and
the actual situation in our country, drawing upon our practical experience in
civil activities, for the purpose of protecting the lawful civil rights and
interests of citizens and legal persons and correctly adjusting civil
relations, so as to meet the needs of the developing socialist modernization.

    Article 2  The Civil Law of the People's Republic of China shall adjust
property relationships and personal relationships between civil subjects with
equal status, that is, between citizens, between legal persons and between
citizens and legal persons.

    Article 3  Parties to a civil activity shall have equal status.

    Article 4  In civil activities, the principles of voluntariness, fairness,
making compensation for equal value, honesty and credibility shall be
observed.

    Article 5  The lawful civil rights and interests of citizens and legal
persons shall be protected by law; no organization or individual may infringe
upon them.

    Article 6  Civil activities must be in compliance with the law; where
there are no relevant provisions in the law, they shall be in compliance with
state policies.

    Article 7  Civil activities shall have respect for social ethics and shall
not harm the public interest, undermine state economic plans or disrupt social
economic order.

    Article 8  The law of the People's Republic of China shall apply to civil
activities within the People's Republic of China, except as otherwise
stipulated by law.

    The stipulations of this Law as regards citizens shall apply to foreigners
and stateless persons within the People's Republic of China, except as
otherwise stipulated by law.
Chapter II  Citizen (Natural Person)

    Section 1  Capacity for Civil Rights and Capacity for Civil Conduct

    Article 9  A citizen shall have the capacity for civil rights from birth
to death and shall enjoy civil rights and assume civil obligations in
accordance with the law.

    Article 10  All citizens are equal as regards their capacity for civil
rights.

    Article 11  A citizen aged 18 or over shall be an adult. He shall have
full capacity for civil conduct, may independently engage in civil activities
and shall be called a person with full capacity for civil conduct.

    A citizen who has reached the age of 16 but not the age of 18 and whose
main source of income is his own labour shall be regarded as a person with
full capacity for civil conduct.

    Article 12  A minor aged 10 or over shall be a person with limited
capacity for civil conduct and may engage in civil activities appropriate to
his age and intellect; in other civil activities, he shall be represented by
his agent ad litem or participate with the consent of his agent ad litem.

    A minor under the age of 10 shall be a person having no capacity for civil
conduct and shall be represented in civil activities by his agent ad litem.

    Article 13  A mentally ill person who is unable to account for his own
conduct shall be a person having no capacity for civil conduct and shall be
represented in civil activities by his agent ad litem.

    A mentally ill person who is unable to fully account for his own conduct
shall be a person with limited capacity for civil conduct and may engage in
civil activities appropriate to his mental health; in other civil activities,
he shall be represented by his agent ad litem or participate with the consent
of his agent ad litem.

    Article 14  The guardian of a person without or with limited capacity for
civil conduct shall be his agent ad litem.

    Article 15  The domicile of a citizen shall be the place where his
residence is registered; if his habitual residence is not the same as his
domicile, his habitual residence shall be regarded as his domicile.

    Section 2  Guardianship

    Article 16  The parents of a minor shall be his guardians.

    If the parents of a minor are dead or lack the competence to be his
guardian, a person from the following categories who has the competence to be
a guardian shall act as his guardian:

    (1) paternal or maternal grandparent;

    (2) elder brother or sister; or

    (3) any other closely connected relative or friend willing to bear the
responsibility of guardianship and having approval from the units of the
minor's parents or from the neighbourhood or village committee in the place
of the minor's residence.

    In case of a dispute over guardianship, the units of the minor's parents
or the neighbourhood or village committee in the place of his residence shall
appoint a guardian from among the minor's near relatives. If disagreement over
the appointment leads to a lawsuit, the people's court shall make a ruling.

    If none of the persons listed in the first two paragraphs of this article
is available to be the guardian, the units of the minor's parents, the
neighbourhood or village committee in the place of the minor's residence or
the civil affairs department shall act as his guardian.

    Article 17  A person from the following categories shall act as guardian
for a mentally ill person without or with limited capacity for civil conduct:

    (1) spouse;

    (2) parent;

    (3) adult child;

    (4) any other near relative;

    (5) any other closely connected relative or friend willing to bear the
responsibility of guardianship and having approval from the unit to which the
mentally ill person belongs or from the neighbourhood or village committee in
the place of his residence.

    In case of a dispute over guardianship, the unit to which the mentally ill
person belongs or the neighbourhood or village committee in the place of his
residence shall appoint a guardian from among his near relatives. If
disagreement over the appointment leads to a lawsuit, the people's court shall
make a ruling.

    If none of the persons listed in the first paragraph of this article is
available to be the guardian, the unit to which the mentally ill person
belongs, the neighbourhood or village committee in the place of his residence
or the civil affairs department shall act as his guardian.

    Article 18  A guardian shall fulfil his duty of guardianship and protect
the person, property and other lawful rights and interests of his ward.
A guardian shall not handle the property of his ward unless it is in the
ward's interests.

    A guardian's rights to fulfil his guardianship in accordance with the law
shall be protected by law.

    If a guardian does not fulfil his duties as guardian or infringes upon the
lawful rights and interests of his ward, he shall be held responsible; if a
guardian causes any property loss for his ward, he shall compensate for such
loss. The people's court may disqualify a guardian based on the application of
a concerned party or unit.

    Article 19  A person who shares interests with a mental patient may apply
to a people's court for a declaration that the mental patient is a person
without or with limited capacity for civil conduct.

    With the recovery of the health of a person who has been declared by a
people's court to be without or with limited capacity for civil conduct, and
upon his own application or that of an interested person. the people's court
may declare him to be a person with limited or full capacity for civil
conduct.

    Section 3  Declarations of Missing Persons and Death

    Article 20  If a citizen's whereabouts have been unknown for two years, an
interested person may apply to a people's court for a declaration of the
citizen as missing.

    If a person's whereabouts become unknown during a war, the calculation of
the time period in which his whereabouts are unknown shall begin on the final
day of the war.

    Article 21  A missing person's property shall be placed in the custody of
his spouse, parents, adult children or other closely connected relatives or
friends. In case of a dispute over custody, if the persons stipulated above
are unavailable or are incapable of taking such custody, the property shall
be placed in the custody of a person appointed by the people's court.

    Any taxes, debts and other unpaid expenses owed by a missing person shall
defrayed by the custodian out of the missing person's property.

    Article 22  In the event that a person who has been declared missing
reappears or his whereabouts are ascertained, the people's court shall, upon
his own application or that of an interested person, revoke the declaration of
his missing-person status.

    Article 23  Under either of the following circumstances, an interested
person may apply to the people's court for a declaration of a citizen's death:

    (1) if the citizen's whereabouts have been unknown for four years or

    (2) if the citizen's whereabouts have been unknown for two years after the
date of an accident in which he was involved.

    If a person's whereabouts become unknown during a war, the calculation of
the time period in which his whereabouts are unknown shall begin on the final
day of the war.

    Article 24  In the event that a person who has been declared dead
reappears or it is ascertained that he is alive, the people's court shall,
upon his own application or that of an interested person, revoke the
declaration of his death.

    Any civil juristic acts performed by a person with capacity for civil
conduct during the period in which he has been declared dead shall be valid.

    Article 25  A person shall have the right to request the return of his
property, if the declaration of his death has been revoked. Any citizen or
organization that has obtained such property in accordance with the Law of
Succession shall return the original items or make appropriate compensation if
the original items no longer exist.

    Section 4  Individual Businesses and Leaseholding Farm Households

    Article 26  "Individual businesses" refers to business run by individual
citizens who have been lawfully registered and approved to engage in
industrial or commercial operation within the sphere permitted by law. An
individual business may adopt a shop name.

    Article 27  "Leaseholding farm households" refers to members of a rural
collective economic organization who engage in commodity production under a
contract and within the spheres permitted by law.

    Article 28  The legitimate rights and interests of individual businesses
and leaseholding farm households shall be protected by law.

    Article 29  The debts of an individual business or a leaseholding farm
household shall be secured with the individual's property if the business is
operated by an individual and with the family's property if the business is
operated by a family.

    Section 5  Individual Partnership

    Article 30  "Individual partnership" refers to two or more citizens
associated in a business and working together, with each providing funds,
material objects, techniques and so on according to an agreement.

    Article 31  Partners shall make a written agreement covering the funds
each is to provide, the distribution of profits. the responsibility for debts,
the entering into and withdrawal from partnership, the ending of partnership
and other such matters.

    Article 32  The property provided by the partners shall be under their
unified management and use. The property accumulated in a partnership
operation shall belong to all the partners.

    Article 33  An individual partnership may adopt a shop name; it shall be
approved and registered in accordance with the law and conduct business
operations within the range as approved and registered.

    Article 34  The operational activities of an individual partnership shall
be decided jointly by the partners, who each shall have the right to carry out
and supervise those activities. The partners may elect a responsible person.
All partners shall bear civil liability for the operational activities of the
responsible person and other personnel.

    Article 35  A partnership's debts shall be secured with the partners'
property in proportion to their respective contributions to the investment or
according to the agreement made.

    Partners shall undertake joint liability for their partnership's debts,
except as otherwise stipulated by law. Any partner who overpays his share of
the partnership's debts shall have the right to claim compensation from the
other partners.
Chapter III  Legal Persons

    Section 1  General Stipulations

    Article 36  A legal person shall be an organization that has capacity for
civil rights and capacity for civil conduct and independently enjoys civil
rights and assumes civil obligations in accordance with the law.

    A legal person's capacity for civil rights and capacity for civil conduct
shall begin when the legal person is established and shall end when the legal
person terminates.

    Article 37  A legal person shall have the following qualifications:

    (1) establishment in accordance with the law;

    (2) possession of the necessary property or funds;

    (3) possession of its own name, organization and premises; and

    (4) ability to independently bear civil liability.

    Article 38  In accordance with the law or the articles of association of
the legal person, the responsible person who acts on behalf of the legal
person in exercising its functions and powers shall be its legal
representative.

    Article 39  A legal person's domicile shall be the place where its main
administrative office is located.

    Article 40  When a legal person terminates, it shall go into liquidation
in accordance with the law and discontinue all other activities.

    Section 2  Enterprise as Legal Person

    Article 41  An enterprise owned by the whole people or under collective
ownership shall be qualified as a legal person when it has sufficient funds as
stipulated by the state; has articles of association, an organization and
premises; has the ability to independently bear civil liability; and has been
approved and registered by the competent authority.

    A Chinese-foreign equity joint venture, Chinese-foreign contractual joint
venture or foreign-capital enterprise established within the People's Republic
of China shall be qualified as a legal person in China if it has the
qualifications of a legal person and has been approved and registered by the
administrative agency for industry and commerce in according with the law.

    Article 42  An enterprise as legal person shall conduct operations within
the range approved and registered.

    Article 43  An enterprise as legal person shall bear civil liability for
the operational activities of its legal representatives and other personnel.

    Article 44  If an enterprise as legal person is divided or merged or
undergoes any other important change, it shall register the change with the
registration authority and publicly announce it.

    When an enterprise as legal person is divided or merged, its rights and
obligations shall be enjoyed and assumed by the new legal person that results
from the change.

    Article 45  An enterprise as legal person shall terminate for any of the
following reasons:

    (1) if it is dissolved by law;

    (2) if it is disbanded;

    (3) if it is declared bankrupt in accordance with the law; or

    (4) for other reasons.

    Article 46  When an enterprise as legal person terminates, it shall cancel
its registration with the registration authority and publicly announce the
termination.

    Article 47  When an enterprise as legal person is disbanded, it shall
establish a liquidation organization and go into liquidation. When an
enterprise as legal person is dissolved or is declared bankrupt, the competent
authority or a people's court shall organize the organs and personnel
concerned to establish a liquidation organization to liquidate the enterprise.

    Article 48  An enterprise owned by the whole people, as legal person,
shall bear civil liability with the property that the state authorizes it to
manage. An enterprise under collective ownership, as legal person, shall bear
civil liability with the property it owns. A Chinese-foreign equity joint
venture, Chinese-foreign contractual joint venture or foreign-capital
enterprise as legal person shall bear civil liability with the property it
owns, except as stipulated otherwise by law.

    Article 49  Under any of the following circumstances, an enterprise as
legal person shall bear liability, its legal representative may additionally
be given administrative sanctions and fined and, if the offence constitutes a
crime, criminal responsibility shall be investigated in accordance with the
law:

    (1) conducting illegal operations beyond the range approved and registered
by the registration authority;

    (2) concealing facts from the registration and tax authorities and
practising fraud;

    (3) secretly withdrawing funds or hiding property to evade repayment of
debts;

    (4) disposing of property without authorization after the enterprise is
dissolved, disbanded or declared bankrupt;

    (5) failing to apply for registration and make a public announcement
promptly when the enterprise undergoes a change or terminates, thus causing
interested persons to suffer heavy losses;

    (6) engaging in other activities prohibited by law, damaging the interests
of the state or the public interest.

    Section 3  Official Organ, Institution and Social Organization as Legal
Person

    Article 50  An independently funded official organ shall be qualified as a
legal person on tbe day it is established.

    If according to law an institution or social organization having the
qualifications of a legal person needs not go through the procedures for
registering as a legal person, it shall be qualified as a legal person on the
day it is established; if according to law it does need to go through the
registration procedures, it shall be qualified as a legal person after being
approved and registered.

    Section 4   Economic Association

    Article 51  If a new economic entity is formed by enderprise and an
institution that engage in economic association and it independently bears
civil liability and has the qualifications of a legal person, the new entity
shall be qualified as a legal person after being approved and registered by
the competent authority.

    Article 52  If the enterprises or an enterprise and an institution that
engage in economic association conduct joint operation but do not have the
qualifications of a legal person, each party to the association shall, in
proportion to its respective contribution to the investment or according to
the agreement made, bear civil liability with the property each party owns or
manages.If joint liability is specified by law or by agreement, the parties
shall assume joint liability.

    Article 53  If the contract for economic association of enterprises or of
an enterprise and an institution specifies that each party shall conduct
operations independently, it shall stipulate the rights and obligation of each
party, and each party shall bear civil liability separately.
Chapter IV  Civil Juristic Acts and Agency

    Section 1  Civil Juristic Acts

    Article 54  A civil juristic act shall be the lawful act of a citizen or
legal person to establish, change or terminate civil rights and obligations.

    Article 55  A civil juristic act shall meet the following requirements:

    (1) the actor has relevant capacity for civil conduct;

    (2) the intention expressed is genuine; and

    (3) the act does not violate the law or the public interest.

    Article 56  A civil juristic act may be in written, oral or other form. If
the law stipulates that a particular form be adopted, such stipulation shall
be observed.

    Article 57  A civil juristic act shall be legally binding once it is
instituted. The actor shall not alter or rescind his act except in accordance
with the law or with the other party's consent.

    Article 58  Civil acts in the following categories shall be null and void:

    (1) those performed by a person without capacity for civil conduct;

    (2) those that according to law may not be independently performed by a
person with limited capacity for civil conduct;

    (3) those performed by a person against his true intentions as a result of
cheating, coercion or exploitation of his unfavourable position by the other
party;

    (4) those that performed through malicious collusion are detrimental to
the interest of the state, a collective or a third party;

    (5) those that violate the law or the public interest;

    (6) economic contracts that violate the state's mandatory plans; and

    (7) those that performed under the guise of legitimate acts conceal
illegitimate purposes.

    Civil acts that are null and void shall not be legally binding from the
very beginning.

    Article 59  A party shall have the right to request a people's court or an
arbitration agency to alter or rescind the following civil acts:

    (1) those performed by an actor who seriously misunderstood the contents
of the acts;

    (2) those that are obviously unfair.

    Rescinded civil acts shall be null and void from the very beginning.

    Article 60  If part of a civil act is null and void, it shall not affect
the validity of other parts.

    Article 61  After a civil act has been determined to be null and void or
has been rescinded, the party who acquired property as a result of the act
shall return it to the party who suffered a loss. The erring party shall
compensate the other party for the losses it suffered as a result of the act;
if both sides are in error, they shall each bear their proper share of the
responsibility.

    If the two sides have conspired maliciously and performed a civil act that
is detrimental to the interests of the state, a collective or a third party,
the property that they thus obtained shall be recovered and turned over to the
state or the collective, or returned to the third party.

    Article 62  A civil juristic act may have conditions attached to it.
Conditional civil juristic acts shall take effect when the relevant conditions
are met.

    Section 2  Agency

    Article 63  Citizens and legal persons may perform civil juristic acts
through agents.

    An agent shall perform civil juristic acts in the principal's name within
the scope of the power of agency. The principal shall bear civil liability
for the agent's acts of agency.

    Civil juristic acts that should be performed by the principal himself,
pursuant to legal provisions or the agreement between the two parties. shall
not be entrusted to an agent.

    Article 64  Agency shall include entrusted agency, statutory agency and
appointed agency.

    An entrusted agent shall exercise the power of agency as entrusted by the
principal; a statutory agent shall exercise the power of agency as prescribed
by law; and an appointed agent shall exercise the power of agency as
designated by a people's court or the appointing unit.

    Article 65  A civil juristic act may be entrusted to an agent in writing
or orally. If legal provisions require the entrustment to be written, it shall
be effected in writing.

    Where the entrustment of agency is in writing, the power of attorney shall
clearly state the agent's name, the entrusted tasks and the scope and duration
of the power of agency, and it shall be signed or sealed by the principal.

    If the power of attorney is not clear as to the authority conferred, the
principal shall bear civil liability towards the third party, and the agent
shall be held jointly liable.

    Article 66  The principal shall bear civil liability for an act performed
by an actor with no power of agency, beyond the scope of his power of agency
or after his power of agency has expired, only if he recognizes the act
retroactively. If the act is not so recognized, the performer shall bear civil
liability for it. If a principal is aware that a civil act is being executed
in his name but fails to repudiate it, his consent shall be deemed to have
been given.

    An agent shall bear civil liability if he fails to perform his duties and
thus causes damage to the principal.

    If an agent and a third party in collusion harm the principal's interests,
the agent and the third party shall be held jointly liable.

    If a third party is aware that an actor has no power of agency, is
overstepping his power of agency, or his power of agency has expired and yet
joins him in a civil act and thus brings damage to other people, the third
party and the actor shall be held jointly liable.

    Article 67  If an agent is aware that the matters entrusted are illegal
but still carries them out, or if a principal is aware that his agent's acts
are illegal but fails to object to them, the principal and the agent shall be
held jointly liable.

    Article 68  If in the principal's interests an entrusted agent needs to
transfer the agency to another person, he shall first obtain the principal's
consent. If the principal's consent is not obtained in advance, the matter
shall be reported to him promptly after the transfer, and if the principal
objects, the agent shall bear civil liability for the acts of the transferee;
however, an entrusted agency transferred in emergency circumstances in order
to safeguard the principal's interests shall be excepted.

    Article 69  An entrusted agency shall end under any of the following
circumstances:

    (1) when the period of agency expires or when the tasks entrusted are
completed;

    (2) when the principal rescinds the entrustment or the agent declines the
entrustment;

    (3) when the agent dies;

    (4) when the principal loses his capacity for civil conduct; or

    (5) when the principal or the agent ceases to be a legal person.

    Article 70  A statutory or appointed agency shall end under any of the
following circumstances:

    (1) when the principal gains or recovers capacity for civil conduct;

    (2) when the principal or the agent dies;

    (3) when the agent loses capacity for civil conduct;

    (4) when the people's court or the unit that appointed the agent rescinds
the appointment; or

    (5) when the guardian relationship between the principal and the agent
ends for other reasons.
Chapter V  Civil Rights

    Section 1  Property Ownership and Related Property Rights

    Article 71  "Property ownership" means the owner's rights to lawfully
possess, utilize, profit from and dispose of his property.

    Article 72  Property ownership shall not be obtained in violation of the
law.

    Unless the law stipulates otherwise or the parties concerned have agreed
on other arrangements, the ownership of property obtained by contract or by
other lawful means shall be transferred simultaneously with the property
itself.

    Article 73  State property shall be owned by the whole people.

    State property is sacred and inviolable, and no organization or individual
shall be allowed to seize, encroach upon, privately divide, retain or destroy
it.

    Article 74  Property of collective organizations of the working masses
shall be owned collectively by the working masses. This shall include:

    (1) land, forests, mountains, grasslands, unreclaimed land, beaches and
other areas that are stipulated by law to be under collective ownership;

    (2) property of collective economic organizations;

    (3) collectively owned buildings, reservoirs, farm irrigation facilities
and educational, scientific, cultural, health, sports and other facilities;
and

    (4) other property that is collectively owned.

    Collectively owned land shall be owned collectively by the village
peasants in accordance with the law and shall be worked and managed by village
agricultural production cooperatives, other collective agricultural economic
organizations or villages' committees. Land already under the ownership of the
township (town) peasants' collective economic organizations may be
collectively owned by the peasants of the township (town).

    Collectively owned property shall be protected by law, and no organization
or individual may seize, encroach upon, privately divide, destroy or illegally
seal up, distrain, freeze or confiscate it.

    Article 75  A citizen's personal property shall include his lawfully
earned income, housing, savings, articles for daily use, objets d'art, books,
reference materials, trees, livestock, as well as means of production the law
permits a citizen to possess and other lawful property.

    A citizen's lawful property shall be protected by law, and no organization
or individual may appropriate, encroach upon, destroy or illegally seal up,
distrain, freeze or confiscate it.

    Article 76  Citizens shall have the right of inheritance under the law.

    Article 77  The lawful property of social organizations, including
religious organizations, shall be protected by law.

    Article 78  Property may be owned jointly by two or more citizens or legal
persons.

    There shall be two kinds of joint ownership, namely co-ownership by shares
and common ownership. Each of the co-owners by shares shall enjoy the rights
and assume the obligations respecting the joint property in proportion to his
share. Each of the common owners shall enjoy the rights and assume the
obligations respecting the joint property.

    Each co-owner by shares shall have the right to withdraw his own share of
the joint property or transfer its ownership. However, when he offers to sell
his share, the other co-owners shall have a right of pre-emption if all other
conditions are equal.

    Article 79  If the owner of a buried or concealed object is unknown, the
object shall belong to the state. The unit that receives the object shall
commend or give a material reward to the unit or individual that turns in the
object.

    Lost-and-found objects, flotsam and stray animals shall be returned to
their rightful owners, and any costs thus incurred shall be reimbursed by the
owners.

    Article 80  State-owned land may be used according to law by units under
ownership by the whole people; it may also be lawfully assigned for use by
units under collective ownership. The state shall protect the usufruct of the
land, and the usufructuary shall be obligated to manage, protect and properly
use the land.

    The right of citizens and collectives to contract for management of land
under collective ownership or of state-owned land under collective use shall
be protected by law. The rights and obligations of the two contracting parties
shall be stipulated in the contract signed in accordance with the law.

    Land may not be sold, leased, mortgaged or illegally transferred by any
other means.

    Article 81  State-owned forests, mountains, grasslands, unreclaimed land,
beaches, water surfaces and other natural resources may be used according to
law by units under ownership by the whole people; or they may also be lawfully
assigned for use by units under collective ownership. The state shall protect
the usufruct of those resources, and the usufructuary shall be obliged to
manage, protect and properly use them.

    State-owned mineral resources may be mined according to law by units under
ownership by the whole people and units under collective ownership; citizens
may also lawfully mine such resources. The state shall protect lawful mining
rights.

    The right of citizens and collectives to lawfully contract for the
management of forests, mountains, grasslands, unreclaimed land, beaches and
water surfaces that are owned by collectives or owned by the state but used by
collectives shall be protected by law. The rights and obligations of the two
contracting parties shall be stipulated in the contract in accordance with the
law.

    State-owned mineral resources and waters as well as forest land,
mountains, grasslands, unreclaimed land and beaches owned by the state and
those that are lawfully owned by collectives may not be sold, leased,
mortgaged or illegally transferred by any other means.(Note (1))

    Article 82  Enterprises under ownership by the whole people shall lawfully
enjoy the rights of management over property that the state has authorized
them to manage and operate, and the rights shall be protected by law.

    Article 83  In the spirit of helping production, making things convenient
for people's lives, enhancing unity and mutual assistance, and being fair and
reasonable, neighbouring users of real estate shall maintain proper
neighbourly relations over such matters as water supply, drainage, passageway,
ventilation and lighting. Anyone who causes obstruction or damage to his
neighbour, shall stop the infringement, eliminate the obstruction and
compensate for the damage.

    Section 2  Creditors' Rights

    Article 84  A debt represents a special relationship of rights and
obligations established between the parties concerned, either according to the
agreed terms of a contract or legal provisions. The party entitled to the
rights shall be the creditor, and the party assuming the obligations shall be
the debtor.

    The creditor shall have the right to demand that the debtor fulfil his
obligations as specified by the contract or according to legal provisions.

    Article 85  A contract shall be an agreement whereby the parties
establish, change or terminate their civil relationship. Lawfully established
contracts shall be protected by law.

    Article 86  When there are two or more creditors to a deal, each creditor
shall be entitled to rights in proportion to his proper share of the credit.
When there are two or more debtors to a deal, each debtor shall assume
obligations in proportion to his share of the debt.

    Article 87  When there are two or more creditors or debtors to a deal,
each of the joint creditors shall be entitled to demand that the debtor fulfil
his obligations, in accordance with legal provisions or the agreement between
the parties; each of the joint debtors shall be obliged to perform the entire
debt, and the debtor who performs the entire debt shall be entitled to ask the
other joint debtors to reimburse him for their shares of the debt.

    Article 88  The parties to a contract shall fully fulfil their obligations
pursuant to the terms of the contract.

    If a contract contains ambiguous terms regarding quality, time limit for
performance, place of performance, or price, and the intended meaning cannot
be determined from the context of relevant terms in the contract, and if the
parties cannot reach an agreement through consultation, the provisions below
shall apply:

    (1) If quality requirements are unclear, state quality standards shall
apply; if there are no state quality standards, generally held standards shall
apply.

    (2) If the time limit for performance is unclear, the debtor may at his
convenience fulfill his obligations towards the creditor; the creditor may
also demand at any time that the debtor perform his obligations, but
sufficient notice shall be given to the debtor.

    (3) If the place of performance is unclear, and the payment is money,
the performance shall be effected at the seat or place of residence of the
party receiving the payment; if the payment is other than money, the
performance shall be effected at the seat or place of residence of the party
fulfilling the obligations.

    (4) If the price agreed by the parties is unclear, the state-fixed price
shall apply. If there is no state-fixed price, the price shall be based on
market price or the price of a similar article or remuneration for a similar
service.

    If the contract does not contain an agreed term regarding rights to patent
application, any party who has completed an invention-creation shall have the
right to apply for a patent.

    If the contract does not contain an agreed term regarding rights to use of
technological research achievements, the parties shall all have the right to
use such achievements.

    Article 89  In accordance with legal provisions or the agreement between
the parties, the performance of a debt may be guaranteed using the methods
below:

    (1) A guarantor may guarantee to the creditor that the debtor shall
perform his debt. If the debtor defaults, the guarantor shall perform the debt
or bear joint liability according to agreement. After performing the debt, the
guarantor shall have the right to claim repayment from the debtor.

    (2) The debtor or a third party may offer a specific property as a pledge.
If the debtor defaults, the creditors shall be entitled to keep the pledge to
offset the debt or have priority in satisfying his claim out of the proceeds
from the sale of the pledge pursuant to relevant legal provisions.

    (3) Within the limits of relevant legal provisions, a party may leave a
deposit with the other party. After the debtor has discharged his debt, the
deposit shall either be retained as partial payment of the debt or be
returned. If the party who leaves the deposit defaults, he shall not be
entitled to demand the return of the deposit; if the party who accepts the
deposit defaults, he shall repay the deposit in double.

    (4) If a party has possession of the other party's property according to
contract and the other party violates the contract by failing to pay a
required sum of money within the specified time limit, the possessor shall
have a lien on the property and may keep the retained property to offset the
debt or have priority in satisfying his claim out of the proceeds from the
sale of the property pursuant to relevant legal provisions.

    Article 90  Legitimate loan relationships shall be protected by law.

    Article 91  If a party to a contract transfers all or part of his
contractual rights or obligations to a third party, he shall obtain the other
party's consent and may not seek profits therefrom.

    Contracts which according to legal provisions are subject to state
approval, such as transfers, must be approved by the authority that originally
approved the contract, unless the law or the original contract stipulates
otherwise.

    Article 92  If profits are acquired improperly and without a lawful basis,
resultng in another person's loss, the illegal profits shall be returned to
the person who suffered the loss.

    Article 93  If a person acts as manager or provides services in order to
protect another person's interests when he is not legally or contractually
obligated to do so, he shall be entitled to claim from the beneficiary the
expenses necessary for such assistance.

    Section 3   Intellectual Property Rights

    Article 94   Citizens and legal persons shall enjoy rights of authorship
(copyrights) and shall be entitled to sign their names as authors, issue and
publish their works and obtain remuneration in accordance with the law.

    Article 95  The patent rights lawfully obtained by citizens and legal
persons shall be protected by law.

    Article 96  The rights to exclusive use of trademarks obtained by legal
persons, individual businesses and individual partnerships shall be protected
by law.

    Article 97  Citizens who make discoveries shall be entitled to the rights
of discovery. A discoverer shall have the right to apply for and receive
certificates of discovery, bonuses or other awards.

    Citizens who make inventions or other achievements in scientific and
technological research shall have the right to apply for and receive
certificates of honour, bonuses or other awards.

    Section 4  Personal Rights

    Article 98   Citizens shall enjoy the rights of life and health.

    Article 99   Citizens shall enjoy the right of personal name and shall be
entitled to determine, use or change their personal names in accordance with
relevant provisions. Interference with, usurpation of and false representation
of personal names shall be prohibited.

    Legal persons, individual businesses and individual partnerships shall
enjoy the right of name. Enterprises as legal persons, individual businesses
and individual partnerships shall have the right to use and lawfully assign
their own names.

    Article 100  Citizens shall enjoy the right of portrait.

    The use of a citizen's portrait for profit without his consent shall be
prohibited.

    Article 101  Citizens and legal persons shall enjoy the right of
reputation. The personality of citizens shall be protected by law, and the use
of insults, libel or other means to damage the reputation of citizens or legal
persons shall be prohibited.

    Article 102  Citizens and legal persons shall enjoy the right of honour.
It shall be prohibited to unlawfully divest citizens and legal persons of
their honorary titles.

    Article 103  Citizens shall enjoy the right of marriage by choice.
Mercenary marriages, marriages upon arbitrary decision by any third party and
any other acts of interferrence in the freedom of marriage shall be prohibited.

    Article 104  Marriage, the family, old people, mothers and children shall
be protected by law.

    The lawful rights and interests of the handicapped shall be protected by
law.

    Article 105  Women shall enjoy equal civil rights with men.
Chapter VI  Civil Liability

    Section 1  General Stipulations

    Article 106  Citizens and legal persons who breach a contract or fail to
fulfil other obligations shall bear civil liability.

    Citizens and legal persons who through their fault encroach upon state or
collective property or the property or person of other people shall bear civil
liability.

    Civil liability shall still be borne even in the absence of fault, if the
law so ,stipulates.

    Article 107  Civil liability shall not be borne for failure to perform a
contract or damage to a third party if it is caused by force majeure, except
as otherwise provided by law.

    Article 108  Debts shall be cleared. If a debtor is unable to repay his
debt immediately, he may repay by instalments with the consent of the creditor
or a ruling by a people's court. If a debtor is capable of repaying his debt
but refuse to do so, repayment shall be compelled by the decision of a
people's court.

    Article 109  If a person suffers damages from preventing or stopping
encroachment on state or collective property, or the property or person of a
third party, the infringer shall bear responsibility for compensation, and the
beneficiary may also give appropriate compensation.

    Article 110  Citizens or legal persons who bear civil liability shall also
be held for administrative responsibility if necessary. If the acts committed
by citizens and legal persons constitute crimes, criminal responsibility of
their legal representatives shall be investigated in accordance with the law.

    Section 2  Civil Liability for Breach of Contract

    Article 111  If a party fails to fulfil its contractual obligations or
violates the term of a contract while fulfilling the obligations, the other
party shall have the right to demand fulfilment or the taking of remedial
measures and claim compensation for its losses.

    Article 112  The party that breaches a contract shall be liable for
compensation equal to the losses consequently suffered by the other party.

    The parties may specify in a contract that if one party breaches the
contract it shall pay the other party a certain amount of breach of contract
damages; they may also specify in the contract the method of assessing the
compensation for any losses resulting from a breach of contract.

    Article 113  If both parties breach the contract, each party shall bear
its respective civil liability.

    Article 114  If one party is suffering losses owing to the other party's
breach of contract, it shall take prompt measures to prevent the losses from
increasing; if it does not promptly do so, it shall not have the right to
claim compensation for the additional losses.

    Article 115  A party's right to claim compensation for losses shall not be
affected by the alteration or termination of a contract.

    Article 116  If a party fails to fulfil its contractual obligations on
account of a higher authority, it shall first compensate for the losses of the
other party or take other remedial measures as contractually agreed and then
the higher authority shall be responsible for settling the losses it sustained.

    Section 3  Civil Liability for Infringement of Rights

    Article 117  Anyone who encroaches on the property of the state, a
collective or another person shall return the property; failing that, he shall
reimburse its estimated price.

    Anyone who damages the property of the state, a collective or another
person shall restore the property to its original condition or reimburse its
estimated price. If the victim suffers other great losses therefrom, the
infringer shall compensate for those losses as well.

    Article 118  If the rights of authorship(copyrights), patent rights,
rights to exclusive use of trademarks, rights of discovery, rights of
invention or rights for scientific and technological research achievements of
citizens or legal persons are infringed upon by such means as plagiarism,
alteration or imitation, they shall have the right to demand that the
infringement be stopped, its ill effects be eliminated and the damages be
compensated for.

    Article 119  Anyone who infringes upon a citizen's person and causes him
physical injury shall pay his medical expenses and his loss in income due to
missed working time and shall pay him living subsidies if he is disabled; if
the victim dies, the infringe shall also pay the funeral expenses, the
necessary living expenses of the deceased's dependents and other such expenses.

    Article 120  If a citizen's right of personal name, portrait, reputation
or honour is infringed upon, he shall have the right to demand that the
infringement be stopped, his reputation be rehabilitated, the ill effects be
eliminated and an apology be made; he may also demand compensation for losses.

    The above paragraph shall also apply to infringements upon a legal
person's right of name, reputation or honour.

    Article 121  If a state organ or its personnel, while executing its
duties, encroaches upon the lawful rights and interests of a citizen or legal
person and causes damage, it shall bear civil liability.

    Article 122  If a substandard product causes property damage or physical
injury to others, the manufacturer or seller shall bear civil liability
according to law. If the transporter or storekeeper is responsible for the
matter, the manufacturer or seller shall have the right to demand compensation
for its losses.

    Article 123  If any person causes damage to other people by engaging in
operations that are greatly hazardous to the surroundings, such as operations
conducted high aboveground, or those involving high pressure, high voltage,
combustibles, explosives, highly toxic or radioactive substances or high-speed
means of transport, he shall bear civil liability; however, if it can be
proven that the damage was deliberately caused by the victim, he shall not
bear civil liability.

    Article 124  Any person who pollutes the environment and causes damage to
others in violation of state provisions for environmental protection and the
prevention of pollution shall bear civil liability in accordance with the law.

    Article 125  Any constructor who engages in excavation, repairs or
installation of underground facilities in a public place, on a roadside or in
a passageway without setting up clear signs and adopting safety measures and
thereby causes damage to others shall bear civil liability.

    Article 126  If a building or any other installation or an object placed
or hung on a structure collapses, detaches or drops down and causes damage to
others, its owner or manager shall bear civil liability, unless he can prove
himself not at fault.

    Article 127  If a domesticated animal causes harm to any person, its
keeper or manager shall bear civil liability. If the harm occurs through the
fault of the victim, the keeper or manager shall not bear civil liability; if
the harm occurs through the fault of a third party, the third party shall bear
civil liability.

    Article 128  A person who causes harm in exercising justifiable defence
shall not bear civil liability. If justifiable defence exceeds the limits of
necessity and undue harm is caused, an appropriate amount of civil liability
shall be borne.

    Article 129  If harm occurs through emergency actions taken to avoid
danger, the person who gave rise to the danger shall bear civil liability. If
the danger arose from natural causes, the person who took the emergency
actions may either be exempt from civil liability or bear civil liability to
an appropriate extent. If the emergency measures taken are improper or exceed
the limits of necessity and undue harm is caused, the person who took the
emergency action shall bear civil liability to an appropriate extent.

    Article 130  If two or more persons jointly infringe upon another person's
rights and cause him damage, they shall bear joint liability.

    Article 131  If a victim is also at fault for causing the damage, the
civil liability of the infringe may be reduced.

    Article 132  If none of the parties is at fault in causing damage, they
may share civil liability according to the actual circumstances.

    Article 133  If a person without or with limited capacity for civil
conduct causes damage to others, his guardian shall bear civil liability. If
the guardian has done his duty of guardianship, his civil liability may be
appropriately reduced.

    If a person who has property but is without or with limited capacity for
civil conduct causes damage to others, the expenses of compensation shall be
paid from his property. Shortfalls in such expenses shall be appropriately
compensated for by the guardian unless the guardian is a unit.

    Section 4  Methods of Bearing Civil Liability

    Article 134  The main methods of bearing civil liability shall be:

    (1) cessation of infringements;

    (2) removal of obstacles;

    (3) elimination of dangers;

    (4) return of property;

    (5) restoration of original condition;

    (6) repair, reworking or replacement;

    (7) compensation for losses;

    (8) payment of breach of contract damages;

    (9) elimination of ill effects and rehabilitation of reputation; and

    (10) extension of apology.

    The above methods of bearing civil liability may be applied exclusively or
concurrently.

    When hearing civil cases, a people's court, in addition to applying the
above stipulations, may serve admonitions, order the offender to sign a pledge
of repentance, and confiscate the property used in carrying out illegal
activities and the illegal income obtained therefrom. It may also impose fines
or detentions as stipulated by law.
Chapter VII  Limitation of Action

    Article 135  Except as otherwise stipulated by law, the limitation of
action regarding applications to a people's court for protection of civil
rights shall be two years.

    Article 136  The limitation of action shall be one year in cases
concerning the following:

    (1) claims for compensation for bodily injuries;

    (2) sales of substandard goods without proper notice to that effect;

    (3) delays in paying rent or refusal to pay rent; or

    (4) loss of or damage to property left in the care of another person.

    Article 137  A limitation of action shall begin when the entitled person
knows or should know that his rights have been infringed upon. However, the
people's court shall not protect his rights if 20 years have passed since the
infringement. Under special circumstances, the people's court may extend the
limitation of action.

    Article 138  If a party chooses to fulfil obligations voluntarily after
the limitation of action has expired, he shall not be subject to the
limitation.

    Article 139  A limitation of action shall be suspended during the last six
months of the limitation if the plaintiff cannot exercise his right of claim
because of force majeure or other obstacles. The limitation shall resume on
the day when the grounds for the suspension are eliminated.

    Article 140  A limitation of action shall be discontinued if suit is
brought or if one party makes a claim for or agrees to fulfilment of
obligations. A new limitation shall be counted from the time of the
discontinuance.

    Article 141  If the law has other stipulations concerning limitation of
action, those stipulations shall apply.
Chapter VIII  Application of Law in Civil Relations with Foreigners

    Article 142  The application of law in civil relations with foreigners
shall be determined by the provisions in this chapter.

    If any international treaty concluded or acceded to by the People's
Republic of China contains provisions differing from those in the civil laws
of the People's Republic of China, the provisions of the international treaty
shall apply, unless the provisions are ones on which the People's Republic of
China has announced reservations.

    International practice may be applied to matters for which neither the law
of the People's Republic of China nor any international treaty concluded or
acceded to by the People's Republic of China has any provisions.

    Article 143  If a citizen of the People's Republic of China settles in a
foreign country, the law of that country may be applicable as regards his
capacity for civil conduct.

    Article 144  The ownership of immovable property shall be bound by the law
of the place where it is situated.

    Article 145  The parties to a contract involving foreign interests may
choose the law applicable to settlement of their contractual disputes, except
as otherwise stipulated by law.

    If the parties to a contract involving foreign interests have not made a
choice, the law of the country to which the contract is most closely connected
shall be applied.

    Article 146  The law of the place where an infringing act is committed
shall apply in handling compensation claims for any damage caused by the act.
If both parties are citizens of the same country or have established domicile
in another country, the law of their own country or the country of domicile
may be applied.

    An act committed outside the People's Republic of China shall not be
treated as an infringing act if under the law of the Pcople's Republic of
China it is not considered an infringing act.

    Article 147  The marriage of a citizen of the People's Republic of China
to a foreigner shall be bound by the law of the place where they get married,
while a divorce shall be bound by the law of the place where a court accepts
the case.

    Article 148  Support shall be bound by the law of the country to which the
supportee is most closely connected.

    Article 149  In the statutory succession of an estate, movable property
shall be bound by the law of the decedent's last place of residence, and
immovable property shall be bound by the law of the place where the property
is situated.

    Article 150  The application of foreign laws or international practice in
accordance with the provisions of this chapter shall not violate the public
interest of the People's Republic of China.
Chapter IX  Supplementary provisions

    Article 151  The people's congresses of the national autonomous areas may
formulate separate adaptive or supplementary regulations or provisions in
accordance with the principles of this Law and in light of the characteristics
of the local nationalities. Those formulated by the people's congresses of
autonomous regions shall be submitted in accordance with the law to the
Standing Committee of the National People's Congress for approval or for the
record. Those formulated by the people's congresses of autonomous prefectures
or autonomous counties shall be submitted to the standing committee of the
people's congress in the relevant province or autonomous region for approval.

    Article 152  If an enterprise owned by the whole people has been
established with the approval of the competent authority of a province,
autonomous region or centrally administered municipality or at a higher level
and it has already been registered with the administrative agency for industry
and commerce, before this Law comes into force, it shall automatically qualify
as a legal person without having to re-register as such.

    Article 153  For the purpose of this Law, "force majeure" means
unforeseeable, unavoidable and insurmountable objective conditions.

    Article 154  Time periods referred to in the Civil Law shall be calculated
by the Gregorian calendar in years, months, days and hours.

    When a time period is prescribed in hours, calculation of the period shall
begin on the prescribed hour. When a time period is prescribed in days, months
and years, the day on which the period begins shall not be counted as within
the period; calculation shall begin on the next day.

    If the last day of a time period falls on a Sunday or an official holiday,
the day after the holiday shall be taken as the last day.

    The last day shall end at 24:00 hours. If business hours are applicable,
the last day shall end at closing time.

    Article 155  In this Law, the terms "not less than," "not more than,"
"within" and "expires" shall include the given figure; the terms "under" and
"beyond" shall not include the given figure.

    Article 156  This Law shall come into force on January 1, 1987.

Note:

    Note 1. Article 2 in Amendment to the Constitution of the People's
Republic of China, adopted at the first session of the seventh National
People's Congress on April 12, 1988, provides:" The right to the use of land
may be transferred according to law." - The Editor

                                                                                                                    



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