Specific Provisions

Chapter Sixteen Contracts for Construction Projects
Article 269 Definition of Contract for Construction Project
A contract for construction project is a contract whereby the contractor performs project construction, and the developer pays the price.
Contracts for construction projects include contracts for survey, design, and construction.

Article 270 Writing Requirement
A contract for construction project shall be in writing.

Article 271 Tendering Process in Construction Project
Tendering for a construction project shall be conducted in an open, fair and impartial manner in accordance with the relevant laws.

Article 272 Contracting and Subcontracting in Construction Projects
The developer may enter into a contract for construction project with a prime contractor, or enter into contracts for survey, design, and construction with the surveyor, designer, and constructor respectively. The developer may not divide a construction project which should be completed by one contractor into several parts and contract them out to several contractors.
Subject to consent by the developer, the prime contractor or the contractor for survey, design, or construction may delegate part of the contracted work to a third person. The third person and the prime contractor or the contractor for survey, design, or construction shall be jointly and severally liable to the developer in respect of the work product completed by such third person. The contractor may not assign in whole to any third person the contracted construction project, or divide the whole contracted construction project into several parts and separately assign each part to a third person under the guise of sub-contracting.
The contractor is prohibited from sub-contracting any part of the project to an entity not appropriately qualified. A sub-contractor is prohibited from further sub-contracting its contracted work. The main structure of the construction project must be constructed by the contractor itself.

Article 273 Major State Construction Projects
A contract for a major state construction project shall be concluded in accordance with the procedure prescribed by the state and in compliance with the state-approved documents such as the investment plan and feasibility studies report, etc.

Article 274 Terms of Contract for Survey or Design
A contract for survey or design includes terms such as the time limit for submission of the relevant basic information and documents (including budget estimate), the quality requirements, fees, and other conditions of cooperation, etc.

Article 275 Terms of Construction Contract
A construction contract includes terms such as the scope of the project, the construction period, the time for commencement and completion of any work to be commissioned in the interim, the quality of the project, the cost of the project, the time for delivery of technical materials, the responsibilities for the supply of materials and equipment, the appropriation of funds and settlement of account, inspection upon completion of the project, the scope and period of quality warranty, and cooperation between the parties, etc.

Article 276 Supervision of Construction Project
Where the construction project is subject to supervision, the developer shall enter into an agency appointment contract for project supervision with a project supervisor in writing. The rights, obligations and associated legal liabilities of the developer and supervisor shall be prescribed in accordance with the provisions hereof concerning agency appointment contracts and the provisions of other relevant laws and administrative regulations.

Article 277 Developer's Right to Inspect
Provided that the developer does not interfere with the normal operation of the contractor, it may inspect the progress and quality of the work at any time.

Article 278 Concealed Work
In the case of concealed work, the contractor shall give the developer notice for inspection prior to concealment. Where the developer fails to timely conduct inspection, the contractor may extend the relevant project milestones, and is entitled to claim damages for work stoppage or work slowdown, etc.

Article 279 Inspection of Completed Project; No Use Prior to Inspection
Upon completion of the construction project, the developer shall conduct acceptance inspection according to the construction drawings and specifications, and in accordance with the rules of construction inspection and quality inspection standard prescribed by the state. Once the construction project has passed the acceptance inspection, the developer shall pay the prescribed price and accept the construction project.
The completed construction project may be put into use only after it has passed the acceptance inspection; if the construction project has not been inspected or has failed the inspection, it may not be put into use.

Article 280 Developer's Remedies in Case of Non-compliant Survey or Design
Where the developer sustains any loss from construction delay due to non-compliance of the survey or design or due to delayed delivery of the survey or design documents, the surveyor or the designer shall continue to improve the survey or design, reduce or forgo the survey fee or design fee, and pay damages.

Article 281 Developer's Remedies in Case of Non-conforming Construction
Where the construction project fails to meet the prescribed quality requirements due to any reason attributable to the constructor, the developer is entitled to require the constructor to repair, re-construct or make alteration free of charge within a reasonable time. Where delivery of the project is delayed due to such repair, re-construction or alteration, the constructor shall be liable for breach of contract.

Article 282 Contractor Liable for Personal and Property Damage
Where the construction project caused personal injury and property damage during its reasonable usage period due to any reason attributable to the contractor, the contractor shall be liable for damages.

Article 283 Contractor's Remedies in Case of Developer's Failure to Provide Necessary Conditions
Where the developer fails to provide raw materials, equipment, site, funds, or technical information at the prescribed time and in accordance with the contractual requirements, the contractor may extend the relevant project milestones, and is entitled to claim damages for work stoppage or slowdown, etc.

Article 284 Contractor's Remedies in Case of Project Interruption Due to Reasons Attributable to Developer
If an ongoing project is stopped or delayed due to any reason attributable to the developer, the developer shall take the appropriate measures to make up or mitigate the loss, and shall indemnify the contractor for its loss and out-of-pocket expenses arising from resulting work stoppage, slowdown, reshipment, re-dispatch of mechanical equipment, and excess inventory of materials and assemblies, etc.

Article 285 Surveyor's Remedies in Case of Developer's Failure to Cooperate
Where in the course of survey or design, any repeating work, work stoppage or change of design occurs due to the developer's change of plan, the incorrect information provided by it, or its failure to provide the working conditions necessary for the survey or design at the prescribed time, the developer shall increase the fees in light of the actual amount of work done by the surveyor or designer.

Article 286 Contractor's Remedies in Case of Developer's Failure to Pay Price
If the developer failed to pay the price in accordance with the contract, the contractor may demand payment from the developer within a reasonable period. Where the developer fails to pay the price at the end of such period, the contractor may enter into an agreement with the developer to liquidate the project, and may also petition the People's Court to auction the project in accordance with the law, unless such project is not fit for liquidation or auction in light of its nature.
The construction project price shall be paid in priority out of proceeds from the liquidation or auction of the project.

Article 287 Provisions Governing Contracts of Hired Works Applicable
A matter not provided for in this Chapter shall be governed by the relevant provision governing contracts of hired works

Chapter Seventeen Carriage Contracts
Section One General Provisions
Article 288 Definition of Carriage Contract
A carriage contract is a contract whereby the carrier carries the passenger or cargo from the place of departure to the prescribed destination, and the passenger, consignor or consignee pays the fare or freightage.

Article 289 Common Carrier May Not Deny Reasonable Carriage Requirement
A common carrier may not deny any normal and reasonable carriage requirement by a passenger or consignor.

Article 290 Obligation of Carrier to Carry in Safe and Timely Manner
The carrier shall safely carry the passenger or cargo to the prescribed destination within the prescribed time or within a reasonable time.

Article 291 Obligation of Carrier to Travel by Prescribed Route
The carrier shall carry the passenger or cargo to the prescribed destination by the prescribed route or the normal route.

Article 292 Passenger's Remedies in Case of Carrier's Failure to Travel by Prescribed Route
The passenger, consignor or consignee shall pay the fare or freightage. Where the carrier failed to carry the passenger or the cargo by the prescribed or normal route, thereby increasing the fare or freightage, the passenger, consignor or consignee may refuse to pay any increased portion thereof.

Section Two Passenger Carriage Contracts
Article 293 Formation of Passenger Carriage Contract
A passenger carriage contract is formed upon the carrier's delivery of the passenger ticket to the passenger, except otherwise agreed by the parties or provided by the relevant usage.

Article 294 Carrier's Remedies in Case of Passenger's Failure to Pay Fare
The passenger shall board the mode of transportation with a valid passenger ticket. If the passenger boards without a ticket, travels beyond the prescribed destination, boards a class higher than the prescribed class, or boards with an expired ticket, he shall pay the fare retroactively, and the carrier may charge additional fare in accordance with the relevant stipulations. Where the passenger fails to pay the fare, the carrier may refuse to carry.

Article 295 Passenger's Failure to Board on Time
Where the passenger is unable to board the mode of transportation at the time prescribed on the passenger ticket due to any reason attributable to himself, he shall carry out the formality for ticket refund or reschedule within the prescribed period. Where the passenger delays in carrying out the relevant formality, the carrier may refuse to refund the fare, and is no longer obligated to carry such passenger.

Article 296 Carry-on Luggage
In the course of carriage, the passenger's carry-on luggage shall be within the prescribed limit. Where his luggage exceeds the prescribed limit on carry-on luggage, the additional luggage shall be checked in.

Article 297 Boarding with Prohibited Item
The passenger may not carry in person, or place in his luggage, any hazardous material which is flammable, explosive, toxic, corrosive, or radioactive, etc., or possibly endangers people or property on board, or an otherwise prohibited item.
Where the passenger violates the previous paragraph, the carrier may unload, destroy or turn over to the relevant authority the prohibited item. Where the passenger insists on carrying in person or placing in his luggage the prohibited item, the carrier shall refuse to carry.

Article 298 Carrier's Obligation to Inform
The carrier shall timely inform the passenger of any major cause preventing it from normal carriage, as well as precautions relating to transportation safety.

Article 299 Passenger's Remedies in Case of Delay
The carrier shall carry the passenger according to the time and carrier number prescribed on the passenger ticket. Where the carrier delays in carriage, it shall, upon request by the passenger, either reschedule or refund the fare.

Article 300 Passenger's Remedies in Case of Unilateral Change of Mode of Transportation by Carrier
Where the carrier unilaterally changed the mode of transportation, thereby lowering the standard of service, it shall, upon request by the passenger, refund or reduce the fare; where the service standard is enhanced as a result, no additional fare shall be charged.

Article 301 Carrier's Obligation to Assist Passenger
In the course of carriage, the carrier shall use its best effort to assist any passenger who has a medical emergency, is in labor or encounters a dangerous situation.

Article 302 Carrier Liable for Injury of Passenger; Exceptions
The carrier shall be liable for damages in case of injury or death of the passenger in the course of carriage, except where such injury or death was attributable to the passenger's own health, or the carrier has established that such injury or death was caused by the passenger's intentional misconduct or gross negligence.
The provisions in the previous paragraph apply to a passenger who is exempted from buying a ticket or holds a discount ticket pursuant to the relevant stipulations, or who is permitted by the carrier to board without a ticket.

Article 303 Provisions Governing Loss of Passenger's Luggage
Where the passenger's carry-on luggage was damaged or lost in the course of carriage, the carrier shall be liable for damages if it was at fault.
Where the passenger's check-in luggage was damaged or lost, the relevant provisions governing cargo carriage apply.

Section Three Cargo Carriage Contracts
Article 304 Consignor's Obligation to Inform; Liability for Misrepresentation
In consigning its cargo, the consignor shall correctly provide the carrier with the name of the consignee or the consignee to whose order the cargo is deliverable, as well as any necessary information relating to carriage of the cargo, such as the name, nature, weight, and quantity of the cargo and the place for taking delivery thereof.
Where the carrier sustains any loss due to the consignor's provision of false information or omission of any material information, the consignor shall be liable for damages.

Article 305 Certain Cargo Carriage Subject to Approval
Where carriage of the cargo is subject to any procedure such as approval or inspection, etc., the consignor shall submit to the carrier the relevant documents evidencing completion of such procedure.

Article 306 Packing of Cargo in Prescribed Manner
The consignor shall pack the cargo in the prescribed manner. Where a packing method was not prescribed or clearly prescribed, Article 156 hereof applies.
Where the consignor violates the previous paragraph, the carrier may refuse to carry.

Article 307 Carriage of Hazardous Materials
In consigning any hazardous material which is inflammable, explosive, toxic, corrosive, or radioactive, etc., the consignor shall, in accordance with the stipulations of the state governing the carriage of hazardous materials, properly pack the hazardous material and affix thereon applicable signs and labels for hazardous materials, and shall submit its name and nature as well as related precautionary measures to the carrier in writing.
If the consignor violates the previous paragraph, the carrier may refuse to carry, and may also take the appropriate measures to prevent loss at the consignor's expense.

Article 308 Consignor's Right of Disposal Prior to Delivery
Prior to carrier's delivery of the cargo to the consignee, the consignor may require the carrier to suspend the carriage, return the cargo, change the destination or deliver the cargo to another consignee, provided that it shall indemnify the carrier for any loss it sustains as a result.

Article 309 Taking Delivery of Cargo by Consignee
Upon arrival of the cargo, if the carrier knows of the consignee, it shall timely notify the consignee, who shall timely take delivery. Where the consignee delays in taking delivery, it shall pay expenses such as safekeeping fee, etc. to the carrier.

Article 310 Inspection by Consignee; Effect of Failure to Inspect
Upon taking delivery of the cargo, the consignee shall inspect the cargo at the prescribed time. Where the time for inspection was not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, the consignee shall inspect the cargo within a reasonable time. The consignee's failure to raise any objection concerning the quantity of, or any damage to, the cargo within the prescribed time or within a reasonable time is deemed prima facie evidence of delivery by the carrier in compliance with the description in the transportation documents.

Article 311 Carrier Liable for Damage or Loss during Carriage; Exceptions
The carrier is liable for damages in case of damage to or loss of the cargo in the course of carriage, provided that it is not liable for damages if it has established that such damage to or loss of the cargo was caused by force majeure, the intrinsic characteristics of the cargo, reasonable depletion, or the fault of the consignor or consignee.

Article 312 Amount of Damages in Case of Loss of Cargo
Where the parties agreed on the amount of damages in case of damage to or loss of the cargo, the damages payable is the prescribed amount; if the amount of damages was not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, it shall be calculated based on the prevailing market price at the destination when the cargo was or should have been delivered. Where a law or administrative regulation provides otherwise in respect of the method for calculation of damages and any limitation on damages, such provisions apply.

Article 313 Liabilities of Joint Carriers Using the Same Method of Transportation
Where two or more carriers jointly carry the cargo using the same method of transportation, the carrier contracting with the consignor shall be responsible for the whole course of carriage. Where the loss occurred at a particular segment, the carrier contracting with the consignor and the carrier for such segment are jointly and severally liable.

Article 314 Freightage in Case of Force Majeure
Where the cargo was lost in the course of carriage due to force majeure, if the freightage has not been collected, the carrier may not require payment thereof; if the freightage has been collected, the consignor may claim refund.

Article 315 Carrier's Possessory Lien in Case of Non-payment
Where the consignor or consignee fails to pay the freightage, safekeeping fee and other expenses in connection with the carriage of the cargo, the carrier is entitled to a possessory lien on the corresponding portion of the cargo, except otherwise agreed by the parties.

Article 316 Placing Cargo in Escrow
Where the consignee is not known or refuses to take delivery of the cargo without cause, the carrier may place the cargo in escrow under Article 101 hereof.

Section Four Multi-modal Carriage Contract
Article 317 Rights and Obligations of Multi-modal Carriage Operator
A multi-modal carriage operator is responsible for performing, or arranging for performance of, the multi-modal carriage contract, and it enjoys the rights and assumes the obligations of a carrier throughout the course of carriage.

Article 318 Agreement between Multi-modal Carriage Operator and Segment Carriers
The multi-modal carriage operator and the segment carriers may prescribe their respective duties concerning each segment, provided that the obligations of the multi-modal carriage operator with respect to the entire course of carriage are not affected by any such agreement.

Article 319 Multi-modal Carriage Document
Upon receipt of the cargo delivered by the consignor, the multi-modal carriage operator shall issue thereto a multi-modal carriage document. The multi-modal carriage document may either be assignable or non-assignable as required by the consignor.

Article 320 Consignor's Liability Notwithstanding Assignment of Document
Where the multi-modal carriage operator sustains any loss due to the fault of the consignor in the course of consigning the cargo, the consignor shall be liable for damages notwithstanding its subsequent assignment of the multi-modal carriage document.

Article 321 Applicable Law Governing Loss of Cargo in Multi-modal Carriage
Where damage to or loss of the cargo occurred within a particular segment of the course of a multi-modal carriage, the multi-modal carriage operator's liability for damages and any limitation thereon are governed by the applicable transportation law of the jurisdiction which such segment is under. Where the segment in which the cargo was damaged or lost cannot be determined, the liability for damages shall be borne in accordance with this Chapter.

Chapter Eighteen Technology Contracts
Section One General Provisions
Article 322 Definition of Technology Contract
A technology contract is a contract whereby the parties prescribe their rights and obligations in respect of the development or transfer of technology, or in respect of technical consulting or service.

Article 323 General Requirements Concerning Technology Contract
Conclusion of a technology contract shall be conducive to the advancement of science and technology, and expedite the conversion, application and dissemination of scientific and technological achievements.

Article 324 Terms of Technology Contract; Patents
Terms of a technology contract shall be prescribed by the parties, and generally include the following:
(i) project name;
(ii) contents, scope and requirement of the subject matter;
(iii) the plan, schedule, period, place, territory and method of performance;
(iv) confidentiality of technical information and materials;
(v) allocation of responsibilities for risks;
(vi) ownership of the technology and allocation of benefits accrued therefrom;
(vii) standard applicable to and method of acceptance test;
(viii)price, remuneration or licensing fee and the method of payment;
(ix) liquidated damages or method for calculation of damages;
(x) method of dispute resolution;
(xi) definition of terms and phrases.
The parties may agree to include the following materials relating to the performance of the contract as an integral part thereof: technical background information, feasibility studies and technical evaluation report, project task matrix and project plan, technical standard, technical specifications, original design and technique documents, as well as other technical documentation.
Where the technology contract involves any patent, it shall set forth the name of the invention/innovation, the patent applicant and the patentee, the date of application, the application number, patent number and the term of the patent.

Article 325 Payment Method; Royalty
The method for payment of the price, remuneration or licensing fee under a technology contract shall be prescribed by the parties, who may prescribe lump-sum payment based on one-time calculation or installment payment based on one-time calculation, and may also prescribe royalty payment or royalty payment plus advance payment of initial fee.
Where a royalty payment method is prescribed, the royalty may be calculated as a percentage of the product price, any increase in product value resulting from exploitation of the patent or use of the technical secret, profit, or product sales, and may also be calculated by any other method prescribed by the parties. The royalty rate may be fixed or subject to annual increase or decrease.
Where a royalty payment is prescribed, the parties shall prescribe in the contract a method for inspection of the relevant accounting books.

Article 326 Employee-developed Technology; Definition
Where the right to use and the right to transfer employee-developed technology belong to a legal person or an organization of any other nature, the legal person or organization may enter into a technology contract in respect of such employee-developed technology. The legal person or organization shall reward or remunerate the individual(s) who developed the technology with a percentage of the benefits accrued from the use and transfer of the employee-developed technology. Where the legal person or organization is to enter into a technology contract for the transfer of the employee-developed technology, the employee-developer has the right of first refusal under the same conditions.
An employee-developed technology is a technology developed in the course of completing a task assigned by a legal person or an organization of any other nature, or developed by primarily utilizing the material and technical resources thereof.

Article 327 Non-employee-developed Technology
The right to use and the right to transfer non-employee-developed technology belong to the individual developer, who may enter into a technology contract in respect thereof.

Article 328 Individual's Rights with Respect to Technology Developed Thereby
The individual who developed the technology is entitled to identify himself as the developer in the documentation related thereto, and to receive honor certificate and reward.

Article 329 Invalidity of Technology-monopolizing and Infringing Contract
A technology contract which illegally monopolizes technology, impairs technological advancement or infringes on the technology of a third person is invalid.

Section Two Technology Development Contract
Article 330 Definition of Technology Development Contract
A technology development contract is a contract concluded in respect of the development of a new technology, product, technique or material and the associated system.
Technology development contracts include commissioned development contracts and cooperative development contracts.
A technology development contract shall be in writing.
A contract on the conversion of a scientific achievement with potential for industrial application is governed by reference to the provisions applicable to technology development contracts.

Article 331 Obligations of Commissioning Party
The commissioning party under a commissioned development contract shall, in accordance with the contract, provide development funds and pay remuneration; supply technical materials and original data; complete its tasks of cooperation; and accept the developed technology.

Article 332 Obligations of Developer in Commissioned Development
The developer under a commissioned development contract shall, in accordance with the contract, prepare and implement the development plan; use development funds in a reasonable manner; timely complete the development and deliver the developed technology, as well as provide the relevant technical materials and necessary technical guidance so as to help the commissioning party master the developed technology.

Article 333 Commissioning Party's Breach
Where the commissioning party breached the contract, thereby causing stoppage, delay or failure of the development, it shall be liable for breach of contract.

Article 334 Developer's Breach
Where the developer breached the contract, thereby causing stoppage, delay or failure of the development, it shall be liable for breach of contract.

Article 335 Obligations of Parties in Cooperative Development
Parties to a cooperative development contract shall, in accordance with the contract, make investment, including investment in the form of technology; participate in the development by performing their respective tasks; and cooperate with each other in the development.

Article 336 Breach of Cooperative Contract
Where a party to a cooperative development contract breached the contract, thereby causing stoppage, delay or failure of the development, it shall be liable for breach of contract.

Article 337 Termination of Contract in Case Technology Becomes Public
Where the technology which is the subject matter of a technology development contract was made public by a third person, thereby rendering performance of the technology development contract no longer meaningful, the parties may terminate the contract.

Article 338 Allocation of Responsibility for Risk of Failure; Duty to Inform upon Discovery of Circumstance Which May Lead to Failure
If in the course of implementing a technology development contract, the development failed in whole or in part due to any insurmountable technical difficulty, allocation of the responsibility for such risk shall be prescribed by the parties. Where the allocation of responsibility for such risk was not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, it shall be shared by the parties in a reasonable manner.
Where a party discovers any circumstance which may lead to the failure of the development in whole or in part as described in the previous paragraph, it shall timely notify the other party and take the appropriate measures to mitigate loss; where the party failed to timely notify the other party and take the appropriate measures, thereby causing further loss, it shall be liable for such further loss.

Article 339 Right to Patent Application in Commissioned Development
Unless otherwise agreed by the parties, the right to apply for patent on the invention/innovation resulting from a commissioned development belongs to the developer. Where the developer is granted a patent, the commissioning party may exploit such patent free of charge.
Where the developer is to assign the right to apply for patent on the invention/innovation resulting from the commissioned development, the commissioning party has the right of first refusal under the same conditions.

Article 340 Right to Patent Application in Cooperative Development
Unless otherwise agreed by the parties, the right to apply for patent on the invention/innovation resulting from a cooperative development belongs to the parties therein jointly. Where a party is to assign its joint patent application right, the other parties have the right of first refusal under the same conditions.
Where a party in the cooperative development declares a waiver of its joint patent application right, the other party may apply by itself, or the other parties may jointly apply, as the case may be. Where a patent is granted on the invention/innovation, the party waiving its patent application right may exploit such patent free of charge.
If a party in the cooperative development does not consent to the application for patent, the other party or parties may not apply for patent.

Article 341 Right to Use or Transfer Technical Secret
The right to use and transfer the technical secret resulting from a commissioned or cooperative development, and the method for allocation of benefits accrued therefrom shall be prescribed by the parties. Where such matters were not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, all of the parties are entitled to use and transfer the technology, provided that the developer in a commissioned development may not transfer the technology to a third person before it delivers the technology to the commissioning party.

Section Three Technology Transfer Contracts
Article 342 Types of Technology Transfer Contract
Technology transfer contracts include contracts for the assignment of patent, assignment of patent application right, transfer of technical secrets, and patent licensing.
A technology transfer contract shall be in writing.

Article 343 Limit on Scope of Implementation May Not Restrict Competition
A technology transfer contract may set forth the scope of exploitation of the patent or the use of the technical secret by the transferor and the transferee, provided that it may not restrict technological competition and technological development.

Article 344 Term of Patent Licensing Contract May Not Exceed Patent Term
A patent licensing contract is only valid during the term of the patent. Where the term of the patent expires or the patent is invalidated, the patentee may not enter into a patent licensing contract with any other person in respect thereof.

Article 345 Obligations of Patent Licensor
The transferor under a patent licensing contract shall, in accordance with the contract, license the patent to the transferee, deliver the technical materials related to the exploitation of the patent, and provide the necessary technical guidance.

Article 346 Obligations of Patent Licensee
The transferee under a patent licensing contract shall exploit the patent in accordance with the contract and may not license the patent to any third person except as provided in the contract; and shall pay the licensing fee in accordance with the contract.

Article 347 Obligations of Transferor of Technical Secret
The transferor under a contract for transfer of technical secret shall, in accordance with the contract, supply the technical materials, provide technical guidance, and warrant the practical applicability and reliability of the technology, and shall abide by its confidentiality obligations.

Article 348 Obligations of Transferee of Technical Secret
The transferee under a contract for transfer of technical secret shall, in accordance with the contract, use the technology, pay the licensing fee and abide by its confidentiality obligations.

Article 349 Warranty of Title, Completeness, Correctness and Effectiveness
The transferor under a technology transfer contract shall warrant that it is the lawful owner of the technology provided, and shall warrant that the technology provided is complete, free from error, effective, and capable of achieving the prescribed goals.

Article 350 Transferee's Confidentiality Obligations
The transferee under a technology transfer contract shall, to the prescribed extent and within the prescribed period, abide by its confidentiality obligations in respect of the non-public and secret portion of the technology provided by the transferor.

Article 351 Transferor's Liabilities for Breach
Where the transferor failed to transfer technology in accordance with the contract, it shall refund the licensing fee in part or in whole, and shall be liable for breach of contract; where the transferor exploited the patent or used the technical secret beyond the prescribed scope, or unilaterally allowed the patent to be exploited or the technical secret to be used by a third person in breach of the contract, it shall cease the breach and be liable for breach of contract; where the transferor breached any prescribed confidentiality obligation, it shall be liable for breach of contract.

Article 352 Transferee's Liabilities for Breach
Where the transferee failed to pay the prescribed licensing fee, it shall pay the overdue licensing fee and pay liquidated damages in accordance with the contract; where it failed to pay the overdue licensing fee and liquidated damages, it shall cease exploitation of the patent or use of the technical secret, return the technical materials, and be liable for breach of contract; where the transferee exploited the patent or used the technical secret beyond the prescribed scope, or allowed the patent to be exploited or the technical secret to be used by a third person without consent by the transferor in breach of the contract, it shall cease the breach and be liable for breach of contract; where the transferee breached any prescribed confidentiality obligation, it shall be liable for breach of contract.

Article 353 Transferor Liable in Case of Infringement; Exception
Where the exploitation of the patent or the use of the technical secret by the transferee in accordance with the contract infringes on the lawful interests of any other person, the liability shall be borne by the transferor, except otherwise agreed by the parties.

Article 354 Sharing of Improvement
The parties may, on the basis of mutual benefit, provide in the technology transfer contract for the method of sharing any subsequent improvement resulting from the exploitation of the patent or use of the technical secret. If such method was not prescribed or clearly prescribed, and cannot be determined in accordance with Article 61 hereof, neither party is entitled to share any subsequent improvement made by the other party.

Article 355 Applicability of Other Laws or Administrative Regulations
Where the relevant laws or administrative regulations provide otherwise in respect of technology import/export contracts or in respect of patent contracts or contracts for patent application, such provisions prevail.

Section Four Technical Consulting Contracts and Technical Service Contracts
Article 356 Definitions of Technical Consulting and Technical Service Contracts
Technical consulting contracts include contracts for provision of feasibility studies, technical forecast, specialized technical investigation, and analysis and evaluation report, etc. in respect of a particular technical project.
A technical service contract means a contract whereby one party solves a particular technical problem for the other party by utilizing its technical knowledge, excluding a contract for construction project or a contract of hired work.

Article 357 Obligations of Client under Technical Consulting Contract
The client under a technical consulting contract shall, in accordance with the contract, describe the problem on which consultancy is sought, provide the technical background information as well as related technical materials and data; and accept the work product from, and pay the remuneration to, the consultant.