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Peoples Republic of Chinas Technology Contract Law
The Peoples Republic of Chinas Technology Contract Law (the Law) was enacted on April 5, 2001, and became effective on October 1, 2001. The Law is a comprehensive system of laws governing the rights and obligations of parties to technology contracts, which consists of eleven chapters, covering the general provisions, formation, modification, execution, and settlement of technology contracts; warranties and disputes; and legal responsibility and other issues.
The Law defines a technology contract as a contract in which each of the two parties entrusts the other party with the acquisition of technology, transfer of technology, or technical services. The Law states that each side of the contracting parties must obtain the consent of the other party before it can conduct any form of transfer of technology or technical services, or provide any form of technical services or transfer of technology on the basis of technology contracts. Technology contracts can also be imposed on certain acts of transferring technology or technology services, such as leasing, franchising, entrusting, and providing joint research projects, joint development projects, and cooperative projects.
For technology transfer contracts, the Law explicitly stipulates that the transfer of technical information and other technology owned by one party must be done in accordance with the principles of fairness, equity and voluntary consent, and the parties must sign a written contract. The Law also stipulates that the parties should agree on certain issues related to the transfer of technology, such as the scope and content of the transfer of technology, its term, the amount of payment, and its purpose. In order for the technology to be successfully transferred, the parties must also agree on other issues, such as the transfer of rights and responsibilities, the nature of the contract, and the liabilities it may incur if a breach of contract occurs.
The Law also states that the parties must conduct a reasonable assessment of their respective risks and benefits, and the interests of all parties must be balanced when drafting the contract. The Law sets out a reasonable requirement for parties to bear their own obligations and rights, and require them to carry out the contract impartially. The parties are not allowed to make any provision that restricts their contractual performance and activities, nor are they allowed to make any provision which is clearly unfair to one of the contracting parties.
In technology transfer contracts, the Law expressly requires the parties to determine the reasonable consideration of technology transfer in the contract, and also requires that the parties must bear the necessary rights and obligations when entering into a technology transfer contract. The Law also provides specific rules on how to determine such consideration, including suitable calculation methods and the reasonable determination of compensation to ensure fairness and equity.
In addition, the Law also stipulates that the technological conductors should guarantee the authenticity and accuracy of the technology they transfer. If they do not, they should bear the corresponding legal responsibility. More specifically, the Law stipulates that the technological conductors should guarantee the accuracy of the technology transferred, and if the technology is fictitious or inadequate, the transferor should bear the responsibility for the losses suffered by the transferee.
Finally, the Law also provides for certain provisions regarding the conditions for voiding a technology contract. One of the most important conditions is that the technology contract is null and void if the parties enter into it by deception or coercion. Furthermore, the Law also stipulates that the technology contract shall be terminated in the event that one of the parties violates the provisions of the contract or if the purpose of the contract cannot be achieved.
In conclusion, the People’s Republic of China’s Technology Contract Law sets out a comprehensive legal system for the formation, execution, and cancellation of technology contracts. It is important for parties to take the time to understand the provisions of the Law before entering into any agreements and to ensure that their technology contracts are compliant with the Law. Failure to abide by the provisions of the Law could have serious implications, both in terms of legal liability and financial losses.
