On July 30, 2014, the State Administration for Industry and Commerce (SAIC) released the Guidelines on the Regulation of Standard Terms of Contract for Online Trading Platforms (the Guidelines), which became effective on the same day.
The Guidelines apply to operators of online trading platforms (the Operators) established in the People’s Republic of China which enter into electronic standard terms of contract (the Standard Terms) with business operators or consumers on such platforms (the Counterparties) through the Internet (including the mobile Internet).
The Guidelines set forth certain requirements on the Standard Terms. Key requirements include:
- The Operators’ and the Counterparties’ rights and obligations should be specified based on the principles of fairness, openness and good faith;
- Any revisions to the Standard Terms should be made public and notified to the Counterparties at least seven days in advance;
- The Standard Terms (or electronic link thereto) should be presented conspicuously on the website homepage;
- The Standard Terms may not relieve the Operators from or place limitations on certainspecified Operator liabilities, such as the liability in connection with causing personal injuries to consumers and the liabiliy to compensate consumers for damages incurred as a result of the Operators’ intentional misconduct or gross negligence;
- The Standard Terms may not impose certain specified liabilities of the Counterparties, such as the liability to pay liquidated damages exceeding reasonable amounts or the liability to bear certain responsibilities that are the legal responsbilities of the Operators, or the liability to perform contractual obligations during an unclear contract term; and
- The Standard Terms may not eliminate or place limitations on certain specified rights of the Counterparties, such as the right to terminate the contract, the right to take remedial measures for breach, the right to recovery of damages, and the right to sue, apply for arbitration or to take other dispute resolution measures in instances of a contract dispute.
Under the Guildelines, in the event of a dispute over the interpretation of the Standard Terms, the Standard Terms should be interpreted based on general understanding. If there are more than one interpretation, the interpretation adverse to the Operators should govern.
- Guidelines on Regulation of Standard Terms of Contract for Online Trading Platforms
- Issuing Authority: the State Administration for Industry and Commerce
- Date of Issuance: July 30, 2014 / Effective Date: July 30, 2014