CHAPTER 22 CONTRACTS FOR BROKERAGE



Article 414 A brokerage contract refers to a contract whereby the broker is, in his/her own name, engaged in trade activities for the benefit of the principal, and the principal pays the remuneration.

Article 415 The expenses of the broker occurred in handling the entrusted matters shall be borne by the broker except as otherwise agreed upon by the parties in the contract.

Article 416 When possessing the entrusted articles, the broker shall keep in appropriate store the said articles.

Article 417 If the entrusted articles have defects or are perishable or deteriorative when they are delivered to the broker, the broker may dispose of these articles with the consent of the principal. Where the principal cannot be contacted in time, the broker may dispose of these articles in a reasonable manner.

Article 418 Where the broker sells at a lower price or buys at a higher price than the price fixed by the principal, consent shall be obtained from the principal. Without the principal's consent, the transaction shall be effective to the principal if the broker makes up the price difference.

Where the broker sells at a higher price or buys at a lower price than the price fixed by the principal, remuneration may be raised according to the terms of the contract. Where there is no such agreement in the contract or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, the benefits shall belong to the principal.

Where the principal has special instructions on price, the broker may not buy or sell violating these instructions.

Article 419 When selling or buying commodities of market fixed price, the broker may act as a buyer or seller, unless the principal expresses oppositely.

The broker may still request the principal under the circumstances stipulated in the preceding paragraph to pay the remuneration.

Article 420 Where the broker buys in the entrusted articles according to the terms of the contract, the principal shall accept the said articles in time. If, after the broker's urging with a notice, the principal refuses to accept the articles without justified reasons, the broker may deposit the entrusted articles according to the provisions of Article 101 of this Law.

If the entrusted articles cannot be sold out or the principal revokes the sale, and the principal does not take back or dispose of the goods after the broker's urging with a notice, the broker may have the entrusted articles deposited according to the provisions of Article 101 of this law.

Article 421 Where a contract is concluded between a broker and a third party, the broker shall directly have the rights and assume obligations under the contract.

If the third party fails in performing its obligations and causes losses to the principal, the broker shall be liable for damages, except as otherwise agreed upon by the parties.

Article 422 The principal shall pay to the broker corresponding remuneration when the broker has finished the whole or part of the entrusted matters. Where the principal fails to pay the remuneration in due time, the broker shall have the right to lien on the entrusted articles, except as otherwise agreed upon by the parties.

Article 423 Matters not addressed in this Chapter shall apply the relevant provisions governing commission contracts.

CHAPTER 23 CONTRACTS FOR INTERMEDIATION



Article 424 An intermediation contract refers to a contract whereby the intermediator reports to the principal the opportunity for concluding a contract or provides intermediate service for concluding a contract, and the principal pays the remuneration.

Article 425 The intermediator shall report truthfully to the principal the matters related to the conclusion of a contract.

Where the intermediator intentionally conceals the important facts relating to the conclusion of the contract or provides false information and harms the interests of the principal, the said party may not claim the payment of remuneration and shall be liable for damages.

Article 426 The principal shall pay the intermediator remuneration according to the terms of the contract if the intermediator has facilitated the establishment of the contract. Where there is no such agreement in the contract on remuneration or such agreement is unclear, nor can it be determined according to the provisions of Article 61 of this Law, the remuneration shall be determined reasonably according to the service rendered by the intermediator. If the establishment of a contract has been facilitated by the intermediate service rendered by the intermediator, the remuneration shall be borne equally by the parties to the contract.

Where the intermediator has facilitated the conclusion of the contract, the expenses for the intermediate service shall be borne by the intermediator.

Article 427 Where the intermediator fails in facilitating the conclusion of a contract, the intermediator may not request for the payment of remuneration, but may request the principal to pay the necessary expenses for the intermediate service.

SUPPLEMENTARY PROVISIONS

Article 428 This Law shall come into force as of October 1st, 1999. The Economic Contract Law of the People's Republic of China, the Law of the People's Republic of China on Economic Contracts Involving Foreign Interests and the Law of the People's Republic of China on Technology Contracts shall be invalidated simultaneously.

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