What Is a Contract?

A contract is a legally enforceable agreement between two parties. Each party to a contract makes a promise to either perform a certain duty or pay a certain amount. If one party fails to act as promised, and the other party has fulfilled the duties under the contract, the other party is entitled to legal relief.


Oral vs. Written Contracts

Generally, both written and oral (spoken) contracts are legally enforceable. It is always best to write down the terms of the contract in case there is some dispute between the parties after the contract is formed. If the contract is oral, the parties to the contract may later remember different details about the contract terms, or forget certain terms entirely.


What Is a Breach of Contract?

A breach of contract is a failure to fulfill the duties under the contract terms. A contract can be breached in the following ways:


  • One party does not perform as he or she promised
  • One party does something that makes it impossible for the other party to perform the duties under the contract
  • One party makes it clear that he or she does not intend to perform the contract duties
  • Damages for Breach of Contract


When one party has breached the contract, the party who has performed is entitled to various remedies for the breach.


Consequential damages - This requires the breaching party to pay the non-breaching party an amount that puts the non-breaching party in the same position they would have been in if the contract was performed

Punitive damages - Courts can force the breaching party to make a payment as a punishment for the breach of contract

Liquidated damages - The parties agree, at the time they make the contract, that if one party breaches the contract, the breaching party should pay a specified sum. Thus, this is an amount written in the contract

Nominal damages - This is a minimal amount provided to the non-breaching party if that party won the case but did not financially lose much

Other Remedies for Breach of Contract

Specific performance - A court can require the breaching party to perform their duties under the contract. This is afforded for unique circumstances.

Rescission - A court can pretend like the contract never existed. Here, neither party would be required to perform the obligations under the contract. If there has been performance by one party, the court does its best to put that party in the same position he or she was in before the contract was formed.


The Time Limit for Filing a Breach of Contract Lawsuit

Every state has a certain time limit, called a statute of limitations, in which a lawsuit must be filed after a breach of contract. If a party wants a remedy for a breach, and they do not file within this time limit, that party cannot file a lawsuit. The amount of time for filing a breach of contract lawsuit is typically two years within Chinese jurisdiction. however, different types of contracts vary in this part. You should consult our China contract or agreement lawyer regarding this issue.


Why Should I Consult with Breach of Contract Lawyers?


Contract law can be quite complicated. Additionally, every state has different lawsuit filing procedures and deadlines for breach of contract claims. Speaking with breach of contract lawyers about your issue can help you maky a clearer decision. An attorney can help a party conform to the applicable procedural rules and collect all the proper documents to prove a breach. Further, an attorney can help you negotiate the terms of a contract before you make or accept an offer.


Knowledgeable and Effective China Contract Attorneys


Our contract lawyers find that most contract disputes or dilemmas are handled at the "big picture" stage. Therefore, we prefer to take a proactive approach designed to prevent breach of contract disputes and avoid costly litigation.


Our business clients with contract concerns include vendors, business stakeholders, third parties, landlords, and business owners conducting business-to-business transactions or confronting contract disputes involving internal or external business partners. We offer comprehensive legal services in contract review, drafting, and negotiation of all types of contracts, including:


-  Partnership agreements

-  Business operating agreements

-  Commercial property lease agreements

-  Asset sales and asset purchases

-  Vendor contracts

-  Business-to-business contracts

-  Distribution agreements

-  Real estate purchase and sale agreements

-  Employment contracts

-  Other contracts


We pursue practical legal solutions with a focus on value. A pragmatic approach is effective for most of our business, commercial, and real estate clients. We approach business legal matters in a direct, results-oriented fashion.


China Employment Contract Lawyer


A critical component of running a successful business involves taking proactive measures to avoid costly litigation. Careful formation of solid contracts can be paramount to avoiding future disputes. While the formation of partnership agreements and other business startup contracts is an important aspect of business entity formation, the formation of legally sound employment contracts for key employees is equally important. We can assist you in drafting, reviewing, and negotiating effective employment contracts and other business contracts.


Effective Resolution of Contract Disputes


In the event of a contract dispute, lawyers at the China Commercial Law Firm make every effort to avoid litigation by settling breach of contract conflicts through voluntary negotiations, mediation, or arbitration. We do not delay filing suit, should we deem litigation to be the best course of action to achieve our clients' objectives.


For a free initial consultation with a China Commercial Law Firm business contract attorney regarding employment agreements, distribution agreements, or other contract concerns, contact a China contract attorney at our Shenzhen-based law firm.

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