China

Article 54

Either party has the right to request a people's court or an arbitration institution to alter or rescind any of the following contracts:

  • any contract which is made under substantial misunderstanding; or
  • any contract the making of which lacks fairness.

Where a party makes the other party enter into a contract against its true will by means of deceit, coercion or taking advantage of its difficulties, the injured party has the right to request a people's court or an arbitration institution to alter or rescind the contract.

Where the request of the party is an alteration to the contract, the people's court or arbitration institution shall not rescind it.

Article 55

The right to rescind shall vanish where:

  • the party with the right to rescind has not exercised it within a year from the date on which it was aware or ought to be aware of the matter for the rescission; or
  • the party with the right to rescind waivers its right by express indication or by its own act after it was aware of the matter for the rescission.

Article 56

An invalid or rescinded contract does not have legal binding force from the outset. If a part of a contract becomes invalid without affecting the validity of the other parts, the other parts remain valid.

Article 57

If a contract becomes invalid, or is rescinded or terminated, the validity of its independently existing clauses pertaining to the settlement of disputes shall not be affected.

Article 58

After a contract becomes invalid or is rescinded, any property obtained under the contract shall be returned. If it is impossible or unnecessary to return the property, compensation shall be made at an estimated price. The party at fault shall compensate the other party for the loss caused by the fault. If both parties have faults, they shall bear their respective responsibilities.

Article 59

If the parties impair by malicious conspiracy the interest of the State, of the collective or of a third party, the property they have thus obtained shall be returned to the State, the collective or the third party.