Introduction
With the rapid development of economy and society, the importance of contractual practice has been fully recognized. The contracts, as the core of commercial practice, not only play a decisive role in the success or failure of business activities, but also constitute a legal basis for the resolution of conflicts, which are translated into written legal documents. In order to ensure the legal validity of contracts, China has enacted a number of laws, regulations and administrative measures relating to contracts (the Contract Law) to regulate the behavior of contracting parties. Taking the Contract Law as the basis, this article will discuss the practice of contracts and the legal issues involved in the contract making process.
Basic Concepts of Contracts
The core of the Contract Law is derived from the principle of voluntariness and the concept of party autonomy. Voluntariness of contracts is the core principle of contract systems, which means that contracts must be conducted freely on the basis of equality and fairness of parties, and should not be subject to external interference or compulsion. Party autonomy means that parties are free to determine the contents of the contracts, the form of the contract and the implementation of the contract in accordance with their needs.
The basic ingredients of contracts refer to the requirements that must be met in order to establish a contract. The basic ingredients of contracts include offer, acceptance, consideration, capacity of parties and legality of object. Offer is the expression by one party of his willingness to enter into a contract with another party. Acceptance is the corresponding expression of willingness. Consideration is the basis that one party serves as the exchange object of the other party. Capacity of parties refers to the requirements that contracting parties, such as age, legal status, etc., may enter into valid contracts. Legality of object is the requirement that the object of the contract must not conflict with laws and generally accepted moral standards.
The essential elements of contract are the terms of the contract, which refer to the specific clauses contained in the contract and the specific rights and obligations established by them. Parties may negotiate the contents of the contract and include the conditions that both parties deem necessary for the conclusion of the contract in the contract. These terms will form the main body of the contract and guide the parties in performing the contract.
In order to make the content of a contract more comprehensive and clear, parties may add ancillary agreements to the contract, supplementing or explaining the terms of the contract. The ancillary agreement usually takes the form of an appendix or is stated in an accompanying document. These agreements may include a statement of intention, a purpose agreement, a future agreement or a dispute resolution agreement.
Rights and Obligations of the Parties
Once the contract is established and comes into effect, the parties involved should perform the contract in good faith, fulfill their respective obligations and perform their respective rights in accordance with the terms of the contract. If a party is unable to perform its obligations due to force majeure or other reasons, it shall promptly notify the other party of the reasons, explain how the other party may avoid damage, and make necessary alternative arrangements.
The obligations of the parties to perform the contract should include:
(1) fulfilling their respective obligations under the contract;
(2) ensuring that the subject matter of the contract is as promised;
(3) notifying the other party of any changes to the subject matter of the contract; and
(4) use the contract reasonably and in good faith.
At the same time, the parties shall also properly exercise the rights provided by the contract, including the right to demand performance, the right to damages and the right to terminate the contract. The parties shall not abuse their rights, such as arbitrarily requiring expensive performance, unreasonably restricting the other partys rights, or unilaterally terminating the contract due to dissatisfaction with the results of the contract.
The parties rights and obligations to perform the contract should be explicitly stated in the contract. Any ambiguities should be clarified as soon as possible to ensure that the contract is properly implemented.
Conclusion
Contracts are an essential element of modern day business, and it is essential that parties involved in the contract be familiar with the legal processes involved. This article has explored the concepts of voluntariness, party autonomy, basic ingredients and terms of the contract, rights and obligations of the parties and other issues related to the practice of contracts. These concepts must be properly understood in order to protect the parties’ interests and ensure that contracts are properly drafted and enforced.
Although this article has discussed a number of issues related to the Contract Law in China, understanding the practice of contracts also requires familiarity with both Chinese and international rules and regulations, as well as knowledge of the specific industry and the needs of the parties. Thus, it is recommended that parties seek legal advice on contractual matters where appropriate.
