中国合同法英文版

中国合同法英文版

CONTRACTLAWOFP.R.CHINA

AdoptedandPromulgatedbytheSecondSessionoftheNinthNationalPeople‘sCongressonMarch15,1999.

Translated&CompiledbyJohnJiang&HenryLiu

GENERALPRINCIPLES

ChapterOne:GeneralProvisions

Article1Purpose

ThisLawisformulatedinordertoprotectthelawfulrightsandinterestsofcontractparties,tosafeguardsocialandeconomicorder,andtopromotesocialistmodernization.

Article2DefinitionofContract;Exclusions

ForpurposesofthisLaw,acontractisanagreementbetweennaturalpersons,legalpersonsorotherorganizationswithequalstanding,forthepurposeofestablishing,altering,ordischargingarelationshipofcivilrightsandobligations.

Anagreementconcerninganypersonalrelationshipsuchasmarriage,adoption,guardianship,etc.shallbegovernedbyotherapplicablelaws.

Article3EqualStandingofParties

Contractpartiesenjoyequallegalstandingandneitherpartymayimposeitswillontheotherparty.

Article4RighttoEnterintoContractVoluntarily

Apartyisentitledtoenterintoacontractvoluntarilyunderthelaw,andnoentityorindividualmayunlawfullyinterferewithsuchright.

Article5Fairness

Thepartiesshallabidebytheprincipleoffairnessinprescribingtheirrespectiverightsandobligations.

Article6GoodFaith

Thepartiesshallabidebytheprincipleofgoodfaithinexercisingtheirrightsandperformingtheirobligations.

Article7Legality

Inconcludingorperformingacontract,thepartiesshallabidebytherelevantlawsandadministrativeregulations,aswellasobservesocialethics,andmaynotdisruptsocialandeconomicorderorharmthepublicinterests.

Article8BindingEffect;LegalProtection

Alawfullyformedcontractislegallybindingontheparties.Thepartiesshallperformtheirrespectiveobligationsinaccordancewiththecontract,andneitherpartymayarbitrarilyamendorterminatethecontract.

Alawfullyformedcontractisprotectedbylaw.

ChapterTwo:FormationofContracts

Article9Capacity;ContractthroughAgent

Inenteringintoacontract,thepartiesshallhavetheappropriatecapacitiesforcivilrightsandcivilacts.

Apartymayappointanagenttoenterintoacontractonitsbehalfunderthelaw.

Article10FormsofContract;WritingRequirement

Acontractmaybemadeinawriting,inanoralconversation,aswellasinanyotherform.

Acontractshallbeinwritingifarelevantlaworadministrativeregulationsorequires.Acontractshallbeinwritingifthepartieshavesoagreed.

Article11DefinitionofWriting

Awritingmeansamemorandumofcontract,letterorelectronicmessage(includingtelegram,telex,facsimile,electronicdataexchangeandelectronicmail),etc.whichiscapableofexpressingitscontentsinatangibleform.

Article12TermsofContract

Thetermsofacontractshallbeprescribedbytheparties,andgenerallyincludethefollowing:

(i)namesofthepartiesandthedomicilesthereof;

(ii)subjectmatter;

(iii)quantity;

(iv)quality;

(v)priceorremuneration;

(vi)time,placeandmethodofperformance;

(vii)liabilitiesforbreachofcontract;

(viii)methodofdisputeresolution.

Thepartiesmayenterintoacontractbyreferencingamodelcontractfortherelevantcontractcategory.

Article13Offer-Acceptance

Acontractisconcludedbytheexchangeofanofferandanacceptance.

Article14DefinitionofOffer

Anofferisaparty‘smanifestationofintentiontoenterintoacontractwiththeotherparty,whichshallcomplywiththefollowing:

(i)Itstermsarespecificanddefinite;

(ii)Itindicatesthatuponacceptancebytheofferee,theofferorwillbeboundthereby.

Article15InvitationtoOffer

Aninvitationtoofferisaparty‘smanifestationofintentiontoinvitetheotherpartytomakeanofferthereto.Adeliveredpricelist,announcementofauction,callfortender,prospectus,orcommercialadvertisement,etc.isaninvitationtooffer.

Acommercialadvertisementisdeemedanofferifitscontentsmeettherequirementsofanoffer.

Article16EffectivenessofOffer,OfferthroughElectronicMessage

Anofferbecomeseffectivewhenitreachestheofferee.

Whenacontractisconcludedbytheexchangeofelectronicmessages,iftherecipientofanelectronicmessagehasdesignatedaspecificsystemtoreceiveit,thetimewhentheelectronicmessageentersintosuchspecificsystemisdeemeditstimeofarrival;ifnospecificsystemhasbeendesignated,thetimewhentheelectronicmessagefirstentersintoanyoftherecipient‘ssystemsisdeemeditstimeofarrival.

Article17WithdrawalofOffer

Anoffermaybewithdrawn.Thenoticeofwithdrawalshallreachtheoffereebeforeoratthesametimeastheoffer.

Article18RevocationofOffer

Anoffermayberevoked.Thenoticeofrevocationshallreachtheoffereebeforeithasdispatchedanoticeofacceptance.

Article19IrrevocableOffer

Anoffermaynotberevoked:

(i)ifitexpresslyindicates,whetherbystatingafixedtimeforacceptanceorotherwise,thatitisirrevocable;

(ii)iftheoffereehasreasontoregardtheofferasirrevocable,andhasundertakenpreparationforperformance.

Article20ExtinguishmentofOffer

Anofferisextinguishedinanyofthefollowingcircumstances:

(i)Thenoticeofrejectionreachestheofferor;

(ii)Theofferorlawfullyrevokestheoffer;

(iii)Theoffereefailstodispatchitsacceptanceattheendoftheperiodforacceptance;

(iv)Theoffereemakesamaterialchangetothetermsoftheoffer.

Article21DefinitionofAcceptance

Anacceptanceistheofferee‘smanifestationofintentiontoassenttoanoffer.

Article22ModeofAcceptance;AcceptancebyConduct

Anacceptanceshallbemanifestedbynotification,exceptwhereitmaybemanifestedbyconductinaccordancewiththerelevantusageorasindicatedintheoffer.

Article23TimelyDispatchofAcceptance

Anacceptanceshallreachtheofferorwithintheperiodprescribedintheoffer.

Wheretheofferdoesnotprescribeaperiodforacceptance,theacceptanceshallreachtheofferorasfollows:

(i)Wheretheofferismadeorally,theacceptanceshallbedispatchedimmediately,unlessotherwiseagreedbytheparties;

(ii)Wheretheofferismadeinanon-oralmanner,theacceptanceshallreachtheofferorwithinareasonabletime.

Article24CommencementofthePeriodforAcceptance

Whereanofferismadebyaletteroratelegram,theperiodforacceptancecommencesonthedateshownontheletterorthedateonwhichthetelegramishandedinfordispatch.Iftheletterdoesnotspecifyadate,theperiodcommencesonthepostingdatestampedontheenvelop.Wheretheofferismadethroughaninstantaneouscommunicationdevicesuchastelephoneorfacsimile,etc.,theperiodforacceptancecommencesoncetheofferreachestheofferee.

Article25ContractFormeduponEffectivenessofAcceptance

Acontractisformedoncetheacceptancebecomeseffective.

Article26EffectivenessofAcceptance

Anoticeofacceptancebecomeseffectiveonceitreachestheofferor.Wheretheacceptancedoesnotrequirenotification,itbecomeseffectiveonceanactofacceptanceisperformedinaccordancewiththerelevantusageorasrequiredbytheoffer.

Whereacontractisconcludedbytheexchangeofelectronicmessages,thetimeofarrivaloftheacceptanceshallbegovernedbyParagraph2ofArticle16hereof.

Article27WithdrawalofAcceptance

Anacceptancemaybewithdrawn.Thenoticeofwithdrawalshallreachtheofferorbeforeoratthesametimeastheacceptance.

Article28LateAcceptance

Anacceptancedispatchedbytheoffereeafterexpirationoftheperiodforacceptanceconstitutesanewoffer,unlesstheofferortimelyadvisestheoffereethattheacceptanceisvalid.

Article29DelayedTransmissionofAcceptance

Iftheoffereedispatcheditsacceptancewithintheperiodforacceptance,andtheacceptance,whichwouldotherwisehavereachedtheofferorinduetimeundernormalcircumstances,reachestheofferorafterexpirationoftheperiodforacceptanceduetoanyotherreason,theacceptanceisvalid,unlesstheofferortimelyadvisestheoffereethattheacceptancehasbeenrejectedongroundsofthedelay.

Article30AcceptanceContainingMaterialChange

Thetermsoftheacceptanceshallbeidenticaltothoseoftheoffer.Apurportedacceptancedispatchedbytheoffereewhichmateriallyaltersthetermsoftheofferconstitutesanewoffer.Achangeinthesubjectmatter,quantity,quality,priceorremuneration,time,placeandmethodofperformance,liabilitiesforbreachofcontractormethodofdisputeresolutionisamaterialchangetothetermsoftheoffer.

Article31AcceptanceContainingNon-materialChanges

Anacceptancecontainingnonmaterialchangestothetermsoftheofferisneverthelessvalidandthetermsthereofprevailasthetermsofthecontract,unlesstheofferortimelyobjectstosuchchangesortheofferindicatedthatacceptancemaynotcontainanychangetothetermsthereof.

Article32TimeofFormationinCaseofMemorandumofContract

Wherethepartiesenterintoacontractbyamemorandumofcontract,thecontractisformedwhenitissignedorsealedbytheparties.

Article33TimeofFormationinCaseofLettersorElectronicMessages;ConfirmationLetter

Wherethepartiesenterintoacontractbytheexchangeoflettersorelectronicmessages,onepartymayrequireexecutionofaconfirmationletterbeforethecontractisformed.Thecontractisformeduponexecutionoftheconfirmationletter.

Article34PlaceofFormation;ElectronicMessages

Theplacewheretheacceptancebecomeseffectiveistheplaceofformationofacontract.

Whereacontractisconcludedbytheexchangeofelectronicmessages,therecipient‘smainplaceofbusinessistheplaceofformationofthecontract;iftherecipientdoesnothaveamainplaceofbusiness,itshabitualresidenceistheplaceofformationofthecontract.Ifthepartieshaveagreedotherwise,suchagreementprevails.

Article35PlaceofFormationinCaseofMemorandumofContract

Whereacontractisconcludedbyamemorandumofcontract,itsplaceofformationistheplacewherethepartiessignorsealthecontract.

Article36EffectofFailuretoConcludeContractinWriting

Whereacontractistobeconcludedbyawritingasrequiredbytherelevantlaworadministrativeregulationorasagreedbytheparties,ifthepartiesfailedtoconcludethecontractinwritingbutonepartyhasperformeditsmainobligationandtheotherpartyhasacceptedtheperformance,thecontractisformed.

Article37EffectofFailuretoSigninCaseofMemorandumofContract

Whereacontractistobeconcludedbyamemorandumofcontract,ifpriortosigningorsealingofthecontract,onepartyhasperformeditsmainobligationandtheotherpartyhasacceptedtheperformance,thecontractisformed.

Article38ContractunderStateMandatoryPlan

Wherethestatehas,inlightofitsrequirements,issuedamandatoryplanorstatepurchaseorder,therelevantlegalpersonsandotherorganizationsshallenterintoacontractbasedontherightsandobligationsofthepartiesprescribedbytherelevantlawsandadministrativeregulations.

Article39StandardTerms;DutytoCallAttention

Whereacontractisconcludedbywayofstandardterms,thepartysupplyingthestandardtermsshallabidebytheprincipleoffairnessinprescribingtherightsandobligationsofthepartiesandshall,inareasonablemanner,calltheotherparty‘sattentiontotheprovision(s)wherebysuchparty‘sliabilitiesareexcludedorlimited,andshallexplainsuchprovision(s)uponrequestbytheotherparty.

Standardtermsarecontractprovisionswhichwerepreparedinadvancebyapartyforrepeateduse,andwhicharenotnegotiatedwiththeotherpartyinthecourseofconcludingthecontract.

Article40InvalidityofCertainStandardTerms

AstandardtermisinvalidifitfallsintoanyofthecircumstancessetforthinArticle52andArticle53hereof,orifitexcludestheliabilitiesofthepartysupplyingsuchterm,increasestheliabilitiesoftheotherparty,ordeprivestheotherpartyofanyofitsmaterialrights.

Article41DisputeConcerningConstructionofStandardTerm

Incaseofanydisputeconcerningtheconstructionofastandardterm,suchtermshallbeinterpretedinaccordancewithcommonsense.Ifthestandardtermissubjecttotwoormoreinterpretations,itshallbeinterpretedagainstthepartysupplyingit.Ifadiscrepancyexistsbetweenthestandardtermandanon-standardterm,thenon-standardtermprevails.

Article42Pre-contractLiabilities

Whereinthecourseofconcludingacontract,apartyengagedinanyofthefollowingconducts,therebycausinglosstotheotherparty,itshallbeliablefordamages:

(i)negotiatinginbadfaithunderthepretextofconcludingacontract;

(ii)intentionallyconcealingamaterialfactrelatingtotheconclusionofthecontractorsupplyingfalseinformation;

(iii)anyotherconductwhichviolatestheprincipleofgoodfaith.

Article43TradeSecrets;LiabilityforDisclosureorImproperUse

Apartymaynotdiscloseorimproperlyuseanytradesecretwhichitbecameawareofinthecourseofnegotiatingacontract,regardlessofwhetheracontractisformed.Ifthepartydisclosedorimproperlyusedsuchtradesecret,therebycausinglosstotheotherparty,itshallbeliablefordamages.

ChapterThree:ValidityofContracts

Article44EffectivenessofContract

Alawfullyformedcontractbecomeseffectiveuponitsformation.

Whereeffectivenessofacontractissubjecttoanyproceduresuchasapprovalorregistration,etc.asrequiredbyarelevantlaworadministrativeregulation,suchprovisionapplies.

Article45ConditionsPrecedent;ConditionsSubsequent;ImproperImpairmentorFacilitation

Thepartiesmayprescribethateffectivenessofacontractbesubjecttocertainconditions.Acontractsubjecttoaconditionprecedentbecomeseffectiveoncesuchconditionissatisfied.Acontractsubjecttoaconditionsubsequentisextinguishedoncesuchconditionissatisfied.

Whereinordertofurtheritsowninterests,apartyimproperlyimpairedthesatisfactionofacondition,theconditionisdeemedtohavebeensatisfied;whereapartyimproperlyfacilitatedthesatisfactionofacondition,theconditionisdeemednottohavebeensatisfied.

Article46ContractTerm

Thepartiesmayprescribeatermforacontract.Acontractsubjecttoatimeofcommencementbecomeseffectiveatsuchtime.Acontractsubjecttoatimeofexpirationisextinguishedatsuchtime.

Article47ContractbyPersonwithLimitedCapacity

Acontractconcludedbyapersonwithlimitedcapacityforcivilactisvaliduponratificationbythelegalagentthereof,providedthatacontractfromwhichsuchpersonaccruesbenefitsonlyortheconclusionofwhichisappropriateforhisage,intelligenceormentalhealthdoesnotrequireratificationbyhislegalagent.

Theotherpartymaydemandthatthelegalagentratifythecontractwithinonemonth.Ifthelegalagentfailstomanifesthisintention,heisdeemedtohavedeclinedtoratifythecontract.Priortoratificationofthecontract,theotherpartyingoodfaithisentitledtocancelthecontract.Cancellationshallbeeffectedbynotification.

Article48ContractbyUnauthorizedAgent

Absentratificationbytheprincipal,acontractconcludedonhisbehalfbyapersonwholackedagencyauthority,whoactedbeyondhisagencyauthorityorwhoseagencyauthoritywasextinguishedisnotbindingupontheprincipalunlessratifiedbyhim,andthepersonperformingsuchactisliable.

Theotherpartymaydemandthattheprincipalratifythecontractwithinonemonth.Wheretheprincipalfailstomanifesthisintention,heisdeemedtohavedeclinedtoratifythecontract.Priortoratificationofthecontract,theotherpartyingoodfaithisentitledtocancelthecontract.Cancellationshallbeeffectedbynotification.

Article49ContractbyPersonwithApparentAgencyAuthority

Wherethepersonlackingagencyauthority,actingbeyondhisagencyauthority,orwhoseagencyauthoritywasextinguishedconcludedacontractinthenameoftheprincipal,ifitwasreasonablefortheotherpartytobelievethatthepersonperformingtheacthadagencyauthority,suchactofagencyisvalid.

Article50ContractExecutedbyLegalRepresentative

Wherethelegalrepresentativeortheperson-in-chargeofalegalpersonoranorganizationofanyothernatureenteredintoacontractactingbeyondhisscopeofauthority,unlesstheotherpartykneworshouldhaveknownthathewasactingbeyondhisscopeofauthority,suchactofrepresentationisvalid.

Article51UnauthorizedDisposalofPropertythroughContract

Whereapieceofpropertybelongingtoanotherpersonwasdisposedofbyapersonwithoutthepowertodoso,suchcontractisneverthelessvalidoncethepersonwiththepowertoitsdisposalhasratifiedthecontract,orifthepersonlackingthepowertodisposeofitwhenthecontractwasconcludedhassubsequentlyacquiredsuchpower.

Article52InvalidatingCircumstances

Acontractisinvalidinanyofthefollowingcircumstances:

(i)Onepartyinducedconclusionofthecontractthroughfraudorduress,therebyharmingtheinterestsofthestate;

(ii)Thepartiescolludedinbadfaith,therebyharmingtheinterestsofthestate,thecollectiveoranythirdparty;

(iii)Thepartiesintendedtoconcealanillegalpurposeundertheguiseofalegitimatetransaction;

(iv)Thecontractharmspublicinterests;

(v)Thecontractviolatesamandatoryprovisionofanylaworadministrativeregulation.

Article53InvalidityofCertainExculpatoryProvisions

Thefollowingexculpatoryprovisionsinacontractareinvalid:

(i)excludingoneparty‘sliabilityforpersonalinjurycausedtotheotherparty;

(ii)excludingoneparty‘sliabilityforpropertylosscausedtotheotherpartybyitsintentionalmisconductorgrossnegligence.

Article54ContractSubjecttoAmendmentorCancellation

EitherofthepartiesmaypetitionthePeople‘sCourtoranarbitrationinstitutionforamendmentorcancellationofacontractif:

(i)thecontractwasconcludedduetoamaterialmistake;

(ii)thecontractwasgrosslyunconscionableatthetimeofitsconclusion.

Ifapartyinducedtheotherpartytoenterintoacontractagainstitstrueintentionbyfraudorduress,orbytakingadvantageoftheotherparty‘shardship,theaggrievedpartyisentitledtopetitionthePeople‘sCourtoranarbitrationinstitutionforamendmentorcancellationofthecontract.

Whereapartypetitionsforamendmentofthecontract,thePeople‘sCourtorarbitrationinstitutionmaynotcancelthecontractinstead.

Article55ExtinguishmentofCancellationRight

Aparty‘scancellationrightisextinguishedinanyofthefollowingcircumstances:

(i)Itfailstoexercisethecancellationrightwithinoneyear,commencingonthedatewhenthepartykneworshouldhaveknownthecauseforthecancellation;

(ii)Uponbecomingawareofthecauseforcancellation,itwaivesthecancellationrightbyexpressstatementorbyconduct.

Article56EffectofInvalidationorCancellation;PartialInvalidationorCancellation

Aninvalidorcanceledcontractisnotlegallybindingabinitio.Whereacontractispartiallyinvalid,andthevalidityoftheremainingprovisionsthereofisnotaffectedasaresult,theremainingprovisionsareneverthelessvalid.

Article57IndependenceofDisputeResolutionProvision

Theinvalidation,cancellationordischargeofacontractdoesnotimpairthevalidityofthecontractprovisionconcerningthemethodofdisputeresolution,whichexistsindependentlyinthecontract.

Article58RemediesinCaseofInvalidationorCancellation

Afteracontractwasinvalidatedorcanceled,thepartiesshallmakerestitutionofanypropertyacquiredthereunder;whererestitutioninkindisnotpossibleornecessary,allowanceshallbemadeinmoneybasedonthevalueoftheproperty.Thepartyatfaultshallindemnifytheotherpartyforitslosssustainedasaresult.Wherebothpartieswereatfault,thepartiesshallbeartheirrespectiveliabilitiesaccordingly.

Article59RemediesinCaseofCollusioninBadFaith

Wherethepartiescolludedinbadfaith,therebyharmingtheinterestsofthestate,thecollectiveorathirdperson,anypropertyacquiredasaresultshallbeturnedovertothestateorbereturnedtothecollectiveorthethirdperson.

ChapterFour:PerformanceofContracts

Article60FullPerformance;PerformanceinGoodFaith

Thepartiesshallfullyperformtheirrespectiveobligationsinaccordancewiththecontract.

Thepartiesshallabidebytheprincipleofgoodfaith,andperformobligationssuchasnotification,assistance,andconfidentiality,etc.inlightofthenatureandpurposeofthecontractandinaccordancewiththerelevantusage.

Article61IndeterminateTerms;SupplementaryAgreement

Ifatermsuchasquality,priceorremuneration,orplaceofperformanceetc.wasnotprescribedorclearlyprescribed,afterthecontracthastakeneffect,thepartiesmaysupplementitthroughagreement;ifthepartiesfailtoreachasupplementaryagreement,suchtermshallbedeterminedinaccordancewiththerelevantprovisionsofthecontractorinaccordancewiththerelevantusage.

Article62GapFilling

Wherearelevanttermofthecontractwasnotclearlyprescribed,andcannotbedeterminedinaccordancewithArticle61hereof,oneofthefollowingprovisionsapplies:

(i)Ifqualityrequirementwasnotclearlyprescribed,performanceshallbeinaccordancewiththestatestandardorindustrystandard;absentanystateorindustrystandard,performanceshallbeinaccordancewiththecustomarystandardoranyparticularstandardconsistentwiththepurposeofthecontract;

(ii)Ifpriceorremunerationwasnotclearlyprescribed,performanceshallbeinaccordancewiththeprevailingmarketpriceattheplaceofperformanceatthetimethecontractwasconcluded,andifadoptionofapricemandatedbythegovernmentorbasedongovernmentissuedpricingguidelinesisrequiredbylaw,suchrequirementapplies;

(iii)Wheretheplaceofperformancewasnotclearlyprescribed,iftheobligationispaymentofmoney,performanceshallbeattheplacewherethepayeeislocated;iftheobligationisdeliveryofimmovableproperty,performanceshallbeattheplacewheretheimmovablepropertyislocated;foranyothersubjectmatter,performanceshallbeattheplacewheretheobligorislocated;

(iv)Ifthetimeofperformancewasnotclearlyprescribed,theobligormayperform,andtheobligeemayrequireperformance,atanytime,providedthattheotherpartyshallbegiventhetimerequiredforpreparation;

(v)Ifthemethodofperformancewasnotclearlyprescribed,performanceshallberenderedinamannerwhichisconducivetorealizingthepurposeofthecontract;

(vi)Ifthepartyresponsiblefortheexpensesofperformancewasnotclearlyprescribed,theobligorshallbeartheexpenses.

Article63PerformanceatGovernmentMandatedPrice

Whereacontractistobeimplementedatapricemandatedbythegovernmentorbasedongovernmentissuedpricingguidelines,ifthegovernmentadjuststhepriceduringtheprescribedperiodofdelivery,thecontractpriceshallbethepriceatthetimeofdelivery.Whereapartydelaysindeliveringthesubjectmatter,theoriginalpriceappliesifthepricehasincreased,andthenewpriceappliesifthepricehasdecreased.Whereapartydelaysintakingdeliveryormakingpayment,thenewpriceappliesifthepricehasincreased,andtheoriginalpriceappliesifthepricehasdecreased.

Article64PerformancetowardaThirdPerson

Wherethepartiesprescribedthattheobligorrenderperformancetoathirdperson,iftheobligorfailstorenderitsperformancetothethirdperson,orrenderednon-conformingperformance,itshallbeliabletotheobligeeforbreachofcontract.

Article65PerformancebyaThirdPerson

Wherethepartiesprescribedthatathirdpersonrenderperformancetotheobligee,ifthethirdpersonfailstoperformorrenderednon-conformingperformance,theobligorshallbeliabletotheobligeeforbreachofcontract.

Article66SimultaneousPerformance

Wherethepartiesoweperformancetowardeachotherandthereisnoorderofperformance,thepartiesshallperformsimultaneously.Priortoperformancebytheotherparty,onepartyisentitledtorejectitsrequirementforperformance.Iftheotherpartyrenderednon-conformingperformance,onepartyisentitledtorejectitscorrespondingrequirementforperformance.

Article67ConsecutivePerformance

Wherethepartiesoweperformancetowardeachotherandthereisanorderofperformance,priortoperformancebythepartyrequiredtoperformfirst,thepartywhoistoperformsubsequentlyisentitledtorejectitsrequirementforperformance.Ifthepartyrequiredtoperformfirstrenderednon-conformingperformance,thepartywhoistoperformsubsequentlyisentitledtorejectitscorrespondingrequirementforperformance.

Article68RighttoSuspendPerformance

Thepartyrequiredtoperformfirstmaysuspenditsperformanceifithasconclusiveevidenceestablishingthattheotherpartyisinanyofthefollowingcircumstances:

(i)Itsbusinesshasseriouslydeteriorated;

(ii)Ithasengagedintransferofassetsorwithdrawaloffundsforthepurposeofevadingdebts;

(iii)Ithaslostitsbusinesscreditworthiness;

(iv)Itisinanyothercircumstancewhichwillormaycauseittoloseitsabilitytoperform.

Whereapartysuspendsperformancewithoutconclusiveevidence,itshallbeliableforbreachofcontract.

Article69NotificationuponSuspensionofPerformance;Termination

IfapartysuspendsitsperformanceinaccordancewithArticle68hereof,itshalltimelynotifytheotherparty.

Iftheotherpartyprovidesappropriateassuranceforitsperformance,thepartyshallresumeperformance.Afterperformancewassuspended,iftheotherpartyfailstoregainitsabilitytoperformandfailstoprovideappropriateassurancewithinareasonabletime,thesuspendingpartymayterminatethecontract.

Article70DifficultyinRenderingPerformanceDuetoCombination

Whereaftereffectingcombination,division,orchangeofdomicile,theobligeefailedtonotify