All posts by legal

In practice, if a seller has concerns on whether the buyer may be able to make payments timely, normally it may require the buyer to mortgage properties or provide a third-party’s guarantee. Where the buyer provides a third-party’s guarantee, if the principal claim-debt contract is altered, whether the guarantee liability shall be altered correspondingly? The answer is negative. There are different circumstances regarding such alteration, which shall be discussed separately. The first circumstance is that the guarantee liability shall be altered correspondingly. Article 695, Paragraph 1 of the “Civil Code” stipulates: “Where the creditor and debtor, without the written consent…

Zhang was a product support engineer. On January 28th, 2019, the company notified Zhang that his employment contract would be terminated due to his incompetence. On January 30th, Zhang filed an appeal to the company’s HR department. On March 4th, the managers of relevant departments discussed on the appeal, after discussed on several specific work issues, they decided that Zhang was not competent for the job. On March 4th and March 7th, the company notified Zhang twice to participate in the performance improvement plan, but Zhang refused. On April 10th, the company notified Zhang that he was still incompetent, since…

In practice, it is very common for a buyer to purchase products from the same supplier for many years. The characteristics of this transaction are continuous trading and continuous settlement. When there is a debt dispute, both parties may argue over the inconsistence of payment, or delivery and so on. The disputes stem from the following key points. Firstly, the agreement is unclear. Many parties may not have signed an agreement or a comprehensive agreement, or some orders have been missed, therefore, it is difficult for the plaintiff to find provisions to prove the agreement regarding acceptance, payment settlement, breach…

Many companies set cafeterias for employees. If an employee gets poisoned after dining in the cafeteria, such illness or death shall be considered as a work-related injury or not? According to the “Reply of the Labor Insurance Department of the China Federation of Trade Unions on Labor Insurance Issues” (implemented on April 1, 1964), “If workers or employees have problems in the following situations with reliable proof, they can be treated according to work-related benefits: getting poisoned after dining in the unit’s cafeteria, which caused illness or death due to food poisoning, and the worker or employee shall not be…

In the previous issue of ‘What should a creditor do if the debtor goes bankrupt? (1)’, we have analyzed the types of debt assets and the impact of whether the debtor has entered the litigation process on debt recovery. This issue will introduce various measures for safeguarding rights under special circumstances. Scenario 1: Creditors and debtors have debts toward each other. According to Article 40 of the “Enterprise Bankruptcy Law”, the creditor may propose to the administrator to set off the debt prior to the acceptance of the bankruptcy application. It should be noted that in order to avoid malicious…

If a company was deregistered, the labor contracts between it and its employees shall be terminated. However, in practice, there is dispute regarding the termination of labor contracts where a branch was deregistered. Because according to the “Company Law”, a branch does not have the corporate capacity and its liability shall be borne by the company. The reason for this dispute is the different interpretations of Article 44 (5) of the “Labor Contract Law”. Article 4 of the “Implementation Regulations of the Labor Contract Law” stipulates that, a branch which has obtained a business license, is entitled to conclude labor…