Inclusion of Ts&Cs

National Law
Chinese law generally requires that where a contract is concluded by use of Ts&Cs, the party providing the Ts&Cs shall abide by the principle of fairness when determining the rights and obligations of the parties, and shall, in a reasonable manner, draw the attention of the other party to clauses which restrict its liability and, if so requested by the other party, explain such clauses. “Reasonably drawing the other party’s attention” requires that the party providing the Ts&Cs shall use, at the time of conclusion of the contract, a special indication, such as words, symbols or a font sufficient to draw the attention of the other party to provisions of such Ts&Cs which restrict that party’s liability.

Other than the above, Chinese law does not provide specific guidance on the requirements regarding the inclusion of Ts&Cs into an agreement.

A mere internet link as reference to Ts&Cs involves risks. Also, it is generally not recommendable to state that the current version of the Ts&Cs (as accessible via web link) shall govern the contractual relationship. The respective version of the Ts&Cs which had been in force at the time of the conclusion of the contract must be clearly definable and obtainable. In case of a dispute, it may otherwise be very difficult for the party providing the Ts&Cs to successfully claim that such provisions have become part of the contractual relationship.

Generally, we advise to make an explicit reference to the application of Ts&Cs in the respective contract or purchase order and to deliver any new version of the Ts&Cs to the contracting party. For reasons of proof, it is furthermore recommended that the contracting party agrees with the Ts&Cs in writing or at least confirms its receipt.

As far as we can see, from a Chinese law perspective, under the CISG, the same situation as under national law applies.

Battle of Forms

National Law
Under Chinese law, the situation is unclear. Two main theories exist: The Last-Shot Rule and the Knock-Out Rule. Some legal commentators are of the opinion that the Last-Shot Rule applies. However, most legal commentators favour the Knock-Out Rule and, as far as we can see, this also constitutes the practice of most PRC courts; i.e. in the case of conflicting Ts&Cs, only those provisions which do not contradict each other will be considered valid. The contradicting provisions will be considered invalid. Instead of the contradicting provisions, the provisions of statutory law will apply.

From a Chinese law perspective, under the CISG, the same situation as under national law applies.


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