Contract Basics
I. Definition
Contract referred to in the law are agreements establishing, modifying, and terminatingthe civil rights and obligations between subjects of equal footing, that isamong natural persons, legal persons and other organizations.
II. Types of Contract
1.By Names
Contract
Agreement
Letterof Intent
Memorandumof Understanding (MOU)
Minuteof TalksCovenant/indenture
Compact
Deed
Protocol
2. By Functions
1) Contracts for International Sale of Goods
2) Contracts for International TechnologyTransfer
3) Contracts for Sino-foreign JointVentures
4) Contracts for InternationalEngineering Projects
5) Contracts for Compensation Trade
6) Contracts for Sino-foreign CooperativeDevelopment of Natural Resources
7) Contracts for International LeasingAffairs
8) Contracts for Sino-foreign Credits andLoans
3. By Format
FormalContract
InformalContract
Purchase Contract
Sales Contract
Form-styleContract
Clause-styleContract
III. Characters
A contract is a legally bindingagreement. In order to create a validcontract, there must be
Offerand Acceptance
Intentionto create legal relation
GenuineConsent
Capacityto contract
Legalof Purpose
IV. Basic Structure
Head:
(1) Title
(2) Addresses of the parties concerned
(3) Contacts:
(4) Contract No.
(5) Signing Date
(6) Place of Signing
2.Preamble : stating clearly the intention of contractand promise to fulfill the contract of the parties concerned
3. the body:
(1) Contract Objective: name of the commodity, quality, quantity, packing, etc.
(2) Price terms
(3) The Seller's Obligation: delivery of the goods, documents, and transferring of the
ownership including the detailed time, place, methods, types and copies ofthe documents, etc.
(4) The Buyer's Obligation: payment and take the delivery including: time, place,methods and currency of the payment and vessel dispatching;
(5) Dispute and settlement: the way to prevent disputes and the settlementincluding: good inspection, validity of claim, force majeure and arbitration
4. Witness/Final Clause

