Civil Law of the People's Republic of China on Guarantees

Author: China Legal Publishing House
Publisher:
Publishing Date: 2000-09-01
Features: Chapter I General Provisions
Article 1 This Law is enacted with a view to promoting the accommodation of funds and the circulation of commodities, ensuring the enforcement of creditor's rights and developing the socialist market economy.
Article 2 If creditors need to have their claims honored by means of guaranty in such economic activities as loans, purchase and sale of commodities, transportation of goods, and contract for processing materials, they may establish guaranty according to the provisions of this Law. The modes of guaranty as provided by this Law are suretyship, mortgage, pledge, lien, and deposit.
Article 3 In guaranty activities, the principles of equality, voluntariness, fairness, honesty, and credibility shall be observed.
Article 4 Where a third party provides guaranty to a creditor for a debtor, the third party may require the debtor to provide him with a counter-guaranty. The provisions on guaranty in this Law shall apply to the counter-guaranty.
Article 5 A guaranty contract is an ancillary contract of the principal contract. If the principal contract is null and void, the guaranty contract shall be null and void accordingly. Where it is otherwise agreed in the guaranty contract, such agreements shall prevail. If a guaranty contract is determined to be null and void, the debtor, the guarantor, or the creditor who is in default shall bear civil liability according to their respective fault.
Chapter II Suretyship
Section 1 Suretyship and Surety
Article 6 Suretyship as used in this Law means an agreement pursuant to which an surety and a creditor agree that the surety shall perform the obligation or bear the liability according to the agreement, when the debtor fails to perform his obligation.