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In cross-border transactions, sending paper contracts by international courier is time-consuming, expensive and creates risks of loss or delay. Signing online with electronic signatures is convenient and cost-saving. More and more companies therefore are willing to use electronic signing. A significant question remains: when a Chinese legal entity and an overseas legal entity sign in this way, what legal effect does the electronic signature have, and does it affect the validity of the contract? As a general rule, the legal effect of electronic signatures certificates is territorial. Certification may give rise to a statutory presumption of authenticity in one jurisdiction, but that presumption does not automatically apply…

In case (2021) Su 06 Min Zhong No. 4333], Jiang, an employee of Company A, held shares in and served as a supervisor of another company without informing Company A. Company A terminated Jiang’s employment contract for breaching its internal rules. Both the trial court and the appellate court upheld the termination. In case (2025) Jin 0319 Min Chu No. 34290, Guo, an employee of Company B, also served as a supervisor of another company. Company B terminated Guo’s employment contract for breaching its prohibition on the outside concurrent employment. The court, however, ultimately found the termination unlawful. Why did the courts…

Commission, discount and rebate are commonplace in modern commercial practice. But do you understand their distinctions, and which are lawful or unlawful? First, let us define each term and its applicable scenarios. Commission, discount and rebate are all common promotional tools. Commission is consideration for intermediary services, generally paid to a middleman who facilitates a transaction. It qualifies as a service, issued with a positive-value invoice, and normally subject to a 6% VAT rate. In contrast, discounts and rebates usually arise between the two parties to a transaction and are tied to the underlying transaction, so their VAT rates follow those applicable to…

After an employee is promoted to a new position, he/she may adapt quickly, or underperform due to capability, mindset or other issues. Therefore, some companies set a promotion review period. If an employee fails to meet the employer’s expectations during the review period, they will be typically reverted to their original position and original compensation. Some employers may ultimately terminate the employment contract pursuant to the provisions on incompetence under the Labor Contract Law. Whether such practices are legal or illegal? Let us analyze this layer by layer. There are no statutory provisions governing such “review period”. Therefore, an employer may formulate internal rules or enter…

Paragraph 2 of Article 562 of the “Civil Code” provides that: “The parties may agree on the grounds for termination of the contract by one party. Where the grounds for contract termination occur, the party entitled to the right of termination may terminate the contract.” This provision permits parties to pre‑agree termination grounds, embodying the core value of party autonomy in private law. Nevertheless, some parties seek to terminate the contract upon even trivial missteps by the counterparty, which also undermines contractual stability. To address this issue, Article 47 of the “Minutes of the National Courts’ Civil‑Commercial Trial Work Conference” (Fa〔2019〕No. 254) stipulates:…

Wu suffered a sudden illness while at work and was admitted to hospital at 11:42 a.m. on April 29, 2021. In the early hours of May 1, Wu experienced cardiac arrest. Heartbeat was temporarily restored after resuscitation, yet spontaneous breathing could not be regained. At 11:20 a.m. on the same day, Wu suffered a second cardiac arrest. The hospital continued resuscitation measures including cardiopulmonary resuscitation and electric defibrillation, and clinical death was declared at 12:08 p.m. The time from admission to the declaration of death exceeded 48 hours. The human‑resources and social‑security authority accordingly made a decision not to recognize…