Contract provisionsTypes of contract
Describe the various types of private banking and wealth management contracts and their main features.
There are many different types of private banking contract, so it is difficult to describe them one by one. However, all are governed by Chinese laws and regulations.Liability standard
What is the liability standard provided for by law? Can it be varied by contract and what is the customary negotiated liability standard in your jurisdiction?
This is governed by the Contract Law of the People’s Republic of China. The doctrine of liability fixation consists of the fault principle and the criterion of strict liability. The criterion of strict liability is that the party who breaks the contract bears the liability even if the party had no intention of breaking the contract. The fault principle indicates that the degree to which there was fault determines the extent to which one party is liable.Mandatory legal provisions
Are any mandatory provisions imposed by law or regulation in private banking or wealth management contracts? Are there any mandatory requirements for any disclosure, notice, form or content of any of the private banking contract documentation?
In accordance with Guiding Opinions on Regulating Asset Management Business of Financial Institutions (Guiding Opinions), financial institutions shall not promise to guarantee principal or income in developing asset management business. In the case of difficulties in redemption, financial institutions shall not redeem with advance funds in any form, nor shall they carry out balance sheet asset management business. This is just a general principle, and the implementation regulations for the Guiding Opinions have not yet been promulgated.Limitation period
What is the applicable limitation period for claims under a private banking or wealth management contract? Can the limitation period be varied contractually? How can the limitation period be tolled or waived?
The limitation period cannot be varied contractually. According to the relevant laws, in most cases, the time limitation of action regarding applications to a people’s court for protection of civil rights is three years. A limitation of action begins when the entitled person knows or should know that his or her rights have been infringed upon. The people’s court will not protect a person’s rights if 20 years have passed since the infringement. However, under special circumstances, the people’s court may extend the limitation of action.
A limitation of action shall be suspended during the last six months of the limitation if the plaintiff cannot exercise his or her right of claim because of force majeure or any other obstacles. The limitation shall resume on the day when the grounds for the suspension are eliminated.
A limitation of action shall be discontinued if a suit is brought, or if one party makes a claim for, or agrees to, the fulfilment of obligations. A new limitation shall begin from the time of the discontinuance.
Law stated dateCorrect on
Give the date on which the information above is accurate.
16 June 2020.