Chapter 6 Termination of the Rights and Obligations of Contracts

Article 91 The rights and obligations of contracts shall be terminated under any of the following circumstances:

    (1) The debt obligations have been performed in accordance with the terms of the contract;

    (2) The contract has been rescinded;

    (3) The debts have been offset against each other;

    (4) The obligor has deposited the object according to law;

    (5) The debt obligations have been exempted by the obligee;

    (6) The creditor's rights and debt obligations are assumed by the same person; or

    (7) Other circumstances for termination as stipulated by the laws or agreed upon by the parties in the contract.

Article 92 When the rights and obligations of contracts are terminated, the parties to a contract shall, abiding by the principle of good faith, perform such obligations as making a notice, providing assistance and maintaining confidentiality according to transaction practices.

Article 93 A contract may be rescinded if the parties to the contract reach a consensus through consultation.

The parties to a contract may agree upon the conditions to rescind the contract by one party. When such conditions are accompanished, the party entitled to rescind the contract may rescind it.

Article 94 The parties to a contract may rescind the contract under any of the following circumstances:

    (1) The purpose of the contract is not able to be realized because of force majeure;

    (2) One party to the contract expresses explicitly or indicates through its acts, before the expiry of the performance period, that it will not perform the principal debt obligations;

    (3) One party to the contract delays in performing the principal debt obligations and fails, after being urged, to perform them within a reasonable time period;

    (4) One party to the contract delays in performing the debt obligations or commits other acts in breach of the contract so that the purpose of the contract is not able to be realized; or

    (5) Other circumstances as stipulated by law.

Article 95 Where the laws stipulate or the parties agree the time limit to exercise the right to rescind the contract, and no party exercises it when the time limit expires, the said right shall be extinguished.

Where the law does not stipulate or the parties make no agreement upon the time limit to exercise the right to rescind the contract, and no party exercises it within a reasonable time period after being urged, the said right shall be extinguished.

Article 96 One party to a contract shall make a notice to the other party if it advances to rescind the contract according to the provisions of Paragraph 2, Article 93 and Article 94 of the Law. The contract shall be rescinded upon the arrival of the notice at the other party. The party may, if the other party disagrees therewith, request the people's court or an arbitration institution to confirm the effectiveness of rescinding the contract.

Where the laws or administrative regulations stipulate that the rescinding of a contract shall go through the formalities of approval and registration, the provisions thereof shall be followed.

Article 97 If a contract has not yet been performed, its performance shall be terminated after the rescission. If it has been performed, a party to the contract may, in light of the performance and the character of the contract, request that the original status be restored or other remedial measures be taken.

Article 98 The termination of the rights and obligations of a contract may not affect the force of the settlement and clearance clauses in the contract.

Article 99 Where the parties to a contract have debts due mutually and the category and character of the debts are the same, any party may offset his debt against the other's one, except that the debts may not be offset according to the provisions of the laws or to the character of the contract.

Any party advancing to offset the debts shall make a notice to the other party. Such notice shall be effective upon the arrival at the other party. The offset may not be accompanied by any conditions or time limit.

Article 100 Where the parties to a contract have debts due mutually and the category and character of the debts are different, the debts may be offset against each other if both parties have reached a consensus through consultation.

Article 101 The obligor may deposit the object if the debt obligations are difficult to be performed under any of the following circumstances:

    (1) The obligor refuses to accept them without justified reasons;

    (2) The obligee is missing;

    (3) The obligee is deceased and the heir is not yet determined, or the obligee has lost his conduct capacity and the guardian is not yet determined; or

    (4) Other circumstances as stipulated by law.

If the object is not fit to be deposited or the deposit expenses are excessively high, the obligor may, according to law, auction or sell the object and deposit the money obtained therefrom.

Article 102 After the object is deposited, the obligor shall, except that the obligee is missing, make a notice promptly to the obligee or the obligee's heir or guardian.

Article 103 The risk of damage to and missing of the object after being deposited shall be borne by the obligee. During the period of depositing, the fruits generated by the object shall belong to the obligee. The deposit expenses shall be borne by the obligee.

Article 104 The obligee may claim the deposited object at any time. However, if the obligee is under a debt due to the obligor the deposit authorities shall refuse him to claim the deposited object at the request of the obligor, before the obligee has performed his debt obligations or provides a guaranty.

The right to claim the deposited object by the obligee shall be extinguished if it has not been exercised within 5 years as of the date of deposit. The deposited object shall be owned by the State with deduction of the deposit expenses.

Article 105 If the obligee exempts the obligor from the debt obligations wholly or in part, the whole or part of the rights and obligations of a contract shall be terminated.

Article 106 If the creditor's rights and debt obligation are assumed by the same person, the rights and obligations of a contract shall be terminated, except for those involving the interests of a third party.