GENERAL PRINCIPLES OF THE CIVIL LAW

    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

    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.

    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.

    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.

    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, <