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B. Making a business contract in Mainland China

The People's Republic of China (PRC) Contract Law 《中華人民共和國合同法》 and its judicial interpretation by the Supreme People's Court ( 最高人民法院 ) is, to certain extent, a combination of the legal principles of contract in the major common law jurisdictions in the world (such as the United Kingdom and Hong Kong). In terms of the requirements for making a legally binding contract, the contract law of Mainland China is quite similar to that of Hong Kong, especially with regards to invitation to treat, offer, acceptance, counter-offer and capacity to enter into contract (see the section on Hong Kong contract law).

However, Mainland Chinese contract law does not have a specific requirement for "consideration" before a contract becomes legally binding. This means that not all kinds of contracts in Mainland China require a mutual exchange of consideration (such as money, goods or services) between the contracting parties. There are also differences between contract law in Mainland China and Hong Kong regarding exemption clauses in standard contracts and damage to property as a result of fraud.

In addition to the general legal principles that have been mentioned, there are specific provisions in the PRC Contract Law for 15 types of contracts: the purchase and sale of goods; the supply and consumption of electricity, water, gas or heating; donations; loans; leases; finance leasing; contracting work; construction projects; carriage (passenger and freight transport); technology (development, transfer, consultation and service); safe-keeping; warehousing; authorisation; brokerage; and intermediary services.

These contracts are subject to special rules. In a contract concerning the purchase and sale of goods, for example, the seller must comply with the PRC Anti-unfair Competition Law. That means when a seller sells a product to a buyer, that seller cannot sell another product to the buyer at the same time or impose other unreasonable conditions that are contrary to the buyer's desire.

Due to the variety and complexity of contract law in Mainland China, it is advisable to consult a PRC lawyer before signing a contract.

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