1000 Business Lessons Every Businessman Must Know

Chapter 116 Common sense of contract law that bosses must know (1)
The production and operation of an enterprise involves all aspects, and it is inevitable to cooperate with other related industries. In cooperation with other enterprises, signing a contract is the beginning of cooperation between the two parties.Knowing how to sign a contract is a compulsory course for managers.Managers must have some common sense of contract law, so as to avoid many losses that could have been avoided due to contract problems in economic exchanges.Sometimes, the failure of a contract can directly lead to the bankruptcy of a business.So, no one can ignore the contract issue.

956. Features of contract law
Contract law is the general term for the legal norms that regulate the commodity exchange relationship between equal subjects.

Contract law has the following characteristics:
(1) The Contract Law emphasizes the principles of equality of subjects, voluntary negotiation, and compensation for equal value.These principles are the basic principles of commodity exchange.

(2) The contract law implements the principle of freedom of contract.In contract law, the contract relationship is mainly adjusted through arbitrary legal norms.The government's intervention in the economic activities of the parties through the contractual relationship is strictly limited within a reasonable range.

(3) The contract law provides the legal protection of the property relationship for the parties from a dynamic perspective.The contract law adjusts the commodity exchange relationship, that is, adjusts the dynamic property circulation relationship.

我国的合同立法是在改革开放初期由计划经济体制向有计划的商品经济体制转轨过程中开始的。继《民法通则》为调整合同关系作了原则性规定外，还先后颁布了《经济合同法》（1981年颁布，1993年作了修改）、《深圳经济合同法》（1985年）和《技术合同法》（1987年），以及大量单行法规和条例。这些都极大地促进了我国经济体制改革的进行，促进了我国社会主义市场经济的培育和发展。1999年3月15日，第九届全国人民代表大会第二次会议通过了《中华人民共和国合同法》并于1999年10月1日施行。

957. Basic principles of contract law
The principles of contract law refer to the fundamental norms whose effectiveness runs through the entire contract law system and norms, and are the basic code of conduct with general guiding significance that guides contract legislation, contract justice, and contract activities.In summary, the basic principles of my country's contract law are:

1. The principle of equality
The principle of equality refers to the principle that parties to a contract with equal status, on the basis of reciprocal rights and obligations, reach an agreement through full consultation to achieve mutual benefit and reciprocity.The legal status of all parties is equal, which is a basic principle of civil law and one of the basic principles of contract law. Article 3 of the "Contract Law" stipulates that the legal status of the parties to a contract is equal, and one party may not impose its will on the other party.This principle includes the following contents: first, the legal status of the parties to the contract is equal; second, the rights and obligations of the parties to the contract are equal; Coercion and other means to sign contracts; Fourth, the legitimate rights and interests of contract subjects are equally protected by law.

2. The principle of voluntariness
The principle of voluntary contract is manifested in that the parties to the contract enjoy the right to voluntarily conclude the contract according to law.The principle of voluntariness embodies the basic characteristics of civil activities, and is a unique principle that distinguishes civil relations from administrative legal relations and criminal legal relations.Except for the mandatory provisions of the law, all civil activities are agreed voluntarily by the parties. Article 4 of the "Contract Law" stipulates that the parties enjoy the right to voluntarily conclude a contract in accordance with the law, and no unit or individual may interfere.The principle of voluntariness runs through the whole process of contract activities: first, whether to sign a contract or not is up to the parties to the contract to decide independently according to their own will; The parties voluntarily agree without breaking the law; fourth, the parties can agree to change the content of the contract; fifth, the parties can agree to terminate the contract; sixth, the parties can agree on the liability for breach of contract, and when a dispute arises, they can independently choose to resolve the dispute Seventh, the parties have the right to choose the form of the contract, such as oral form, written form, notarized form, etc.

3. Principle of fairness
According to Article 5 of the Contract Law, the parties shall follow the principle of fairness to determine the rights and obligations of each party.The principle of fairness requires that the rights and obligations between the parties to the contract should be fair and reasonable, and generally balanced, emphasizing the equivalence between the performance of one party and the performance of the other party, and the reasonable distribution of contractual burdens and risks.One is to require the parties to determine the rights and obligations of both parties in accordance with the principle of fairness when concluding a contract, and they must not abuse rights, cheat, or engage in malicious collusion under the guise of concluding a contract; the second is to determine a reasonable allocation of risks based on the principle of fairness; , to determine the liability for breach of contract.

4. The principle of good faith
Article 6 of the "Contract Law" stipulates that the parties shall follow the principle of good faith in exercising their rights and performing their obligations.The parties shall be honest and trustworthy, exercise their powers and perform their obligations in good faith, and shall not engage in malicious acts such as fraud.In the case of laws and contracts that do not stipulate or are unclear, the laws and contracts must be interpreted based on the principle of good faith to balance the interests of the parties.

5 principles of legality
Article 7 of the "Contract Law" clearly stipulates that the parties shall abide by laws and administrative regulations when entering into and performing a contract, respect social morality, and shall not disrupt social and economic order or damage social and public interests.

958. Issues of guarantee for conclusion of contract

Guarantee refers to a legal system in which a third party (guarantor) other than the parties to the contract guarantees that one party (guaranteed) will perform the contract in its own name, and the guarantor shall bear the responsibility when the guaranteed party fails to perform the contract.There are three ways of guaranty: one is that the guarantor and the debtor conclude a guaranty contract; the other is that the guarantor unilaterally submits a letter of guarantee to the creditor;Guarantee is a frequently used guarantee method in various economic contracts, especially loan contracts generally have guarantee clauses.

(1) How to choose a guarantor.The purpose of setting up a guarantee is to perform the contract. When the guaranteed party fails to perform the contract, the surety shall bear the responsibility.Therefore, the guarantor of the contract must have the ability to guarantee.

(2) To conclude a guarantee, the consent of the guarantor must be obtained. When the debtor selects a guarantor, the consent of the creditor must also be obtained, and the guarantor must clearly express the intention of guarantee.When issuing a letter of guarantee to the creditor separately, the guarantor must specify the content of the guarantee, sign and seal it.If it is only to provide the situation of the guaranteed person or introduce a certain unit to sign the contract, this is not a legal guarantee.This point often causes confusion in practice, and we should pay attention to the difference so as not to be fooled.

(3) Determination of the scope of guarantee.What the guarantor specifically guarantees, whether it is the whole of the guarantee contract or a part of the guarantee contract, must be agreed by the three parties and clearly stated in the contract.In practice, the scope of guarantee in some contracts is vague, such as "the guarantor is responsible for supervising the payment", or "if the borrower fails to repay when due, our unit shall be responsible for deducting the repayment from the borrower's account". Failure to clarify the responsibilities of the guarantor will inevitably lead to disputes.

Pay attention when signing the contract: ①The effective time of the guarantee should be consistent with the effective time of the main contract. The calculation will start after the formalities. If the effective date of the main contract is changed, the consent of the guarantor shall be obtained. ②The validity period of the guarantee should be consistent with the validity period of the main contract. If it is stipulated that the guarantee is the condition for the establishment of the contract, the main contract will not take effect until the guarantee conditions are mature.

959. Mortgage problems in conclusion of contracts

Mortgage refers to a guarantee in which the debtor or a third party in the contract provides a certain property owned or managed by itself to the creditor as a guarantee.Mortgage is different from guarantee. Guarantee is a kind of personal guarantee, while mortgage is the guarantee of things.When the debtor fails to perform the debt, the mortgagee has the right to discount the mortgaged property in accordance with the law, or sell the mortgaged property, and receive priority compensation from it.Therefore, mortgages are more reliable than guarantees in guaranteeing the performance of contracts.Mortgage can exist as a form of contract or as a clause in the contract, but no matter what form it is in, it is a subsidiary contract of the original contract, rather than an independent contract.When entering into mortgage terms, you should generally pay attention to the following issues:

(1) The mortgagor can be the debtor in the contract or a third party, but it must be the person who enjoys the property ownership or management right of the mortgaged property.Collective enterprises, private enterprises and individual citizens provide mortgages for their own property, generally at their own discretion.Joint ventures and joint-stock companies generally require the consent of all parties to the investment or the board of directors to provide mortgages on their properties.There are certain restrictions on property mortgages of state-owned enterprises. According to Article 5 of the "Regulations on the Transformation of Operational Mechanisms of Industrial Enterprises Owned by the Whole People", enterprises can independently decide to mortgage general fixed assets, and mortgages of key equipment, complete sets of equipment or important buildings, It must be approved by the competent government department, otherwise, the mortgage will be invalid.This requires the parties to pay attention to distinguishing the nature of property ownership and the type of property when signing a contract, and not to use important state-owned fixed assets as collateral.

(2) The collateral can be movable property or immovable property, but it must be property that can be transferred according to law.

(3) After the mortgage is established, the mortgagee has the real right to the mortgaged property, and the mortgagor can no longer mortgage the property to others, otherwise, repeated mortgages are invalid.When the mortgaged property is in the custody of the mortgagor, if the mortgagor wants to transfer the mortgaged property to others, he must obtain the consent of the mortgagee, otherwise, the mortgagee has the right to claim the mortgaged property; when the mortgaged property is in the custody of the mortgagee, the mortgagee People cannot re-mortgage the collateral to others without authorization.

960. Deposit issues for conclusion of contracts

The deposit is one of the forms of guarantee that one party pays the other party a certain amount of currency deposit when signing the contract in order to ensure the performance of the contract. It can be used as legal evidence of the establishment of the contract and can guarantee the performance of the contract. The breaching party will be subject to the "deposit penalty" sanctions.Therefore, a deposit is a frequently used form of security.In practice, how to set the deposit terms?
(1) Specify the scope of application of the deposit.According to the contract law, the parties can pay a deposit to the other party, but this does not mean that all contracts must pay a deposit.Property insurance contracts, loan contracts, construction and installation project contracting contracts, power supply contracts, cargo transportation contracts, etc. do not require or are inappropriate to pay a deposit according to their nature.For agricultural and sideline product purchase and sale contracts, construction project survey and design contracts, processing contracts, and industrial and mining product purchase and sale contracts, the parties may agree to pay a deposit in the contract.

(2) Agreement on the amount of the deposit.There are also two kinds of deposits: legal and agreed. Where the contract regulations stipulate the payment of the deposit standard, it is a legal deposit. For example, the "Construction Project Survey and Design Contract Regulations" stipulates that the maximum amount of the deposit is 30% of the survey fee. The party can only pay the deposit within 30%. % below the limit.If the laws and regulations allow the parties to agree on the deposit by themselves, the parties shall negotiate and agree.

961. The issue of advance payment for conclusion of a contract
Advance payment means that one party pays the other party a certain amount of currency in advance according to the contract agreement after the contract is signed.After the contract is fulfilled, the advance payment can be offset against the payment for goods or remuneration; if the contract is not performed, the party receiving the advance payment shall return the advance payment and interest in full.There are several issues that should be brought to the attention of the contract signer.

(1) Correctly understand the pros and cons of prepayment.In a certain situation, the party involved prepays part of the payment in order to purchase raw materials and products that are in short supply in the market, and it does work.However, the extensive use of advance payment provides an opportunity for fraud criminals. Some fraudsters use the method of advance payment to defraud the advance payment by signing a contract. They do not intend to perform the contract at all. Spend everything, or run away every day, so that many business units are deceived, and they lose money and goods, and suffer heavy losses.When signing a contract, you should learn a lesson and don't agree on advance payment casually. Even if some contracts do require advance payment, you should proceed with caution to prevent being deceived.

(2) Scope of application of advance payment.Under normal circumstances, advance receipts and advance payments are not allowed, and only projects approved by the state can adopt the method of advance receipts and advance payments.

(3) Pay attention to distinguish between advance payment and deposit.The advance payment of advance payment and the advance payment of deposit have the same superficially, but there are differences in principle between the two:

①The nature is different.The deposit is a guarantee measure to guarantee the performance of the contract, while the advance payment is only a kind of advance payment and does not have the nature of guarantee;

(End of this chapter)