The Civil Code stipulates that if the parties to a contract do not sign, the contract has not been established. An unestablished contract is not legally binding, so no breach of contract will occur and liability for breach of contract cannot be pursued.

Article 490 of the People's Republic of China and the Civil Code

When a contract is established, if the parties conclude a contract in the form of a contract, it shall be signed, sealed or signed by both parties. A contract is formed at the time of fingerprinting. Before signing, sealing or fingerprinting, one party has performed its main obligations and the contract is established when the other party accepts it.

Laws, administrative regulations or the parties agree that a contract should be concluded in writing. If the parties do not do so in writing but one party has performed its main obligations and the other party accepts it, the contract is established.

Characteristics of damages for breach of contract

Damages are a type of civil liability arising from the debtor's failure to perform or improper performance of contractual obligations. After the contract comes into effect, if the creditor suffers damage due to the debtor's breach of contract, the original contractual debt relationship between the parties will be transformed into a debt relationship for damages. Damages as a form of liability for breach of contract.

The difference between damages in contractual fault liability, damages after the contract is invalidated, and damages after the contract is revoked is that it can only be based on the premise of the existence of a legal and valid contract. Damages for breach of contract do not apply if the contract does not exist, is void or is revoked.

In principle, damages are only compensatory and not punitive. Compensation for breach of contract is a type of civil liability. It should be the same as other civil liabilities. From the legal nature, it only has the function of compensation and abandons the function of punishment. Furthermore, based on the principle of equivalent compensation in civil law, any civil subject who causes damage to others must compensate with an equivalent amount of property.

After one party breaches the contract, the breaching party must compensate the other party for all losses suffered due to the breach of contract. This principle also fully applies to damages for breach of contract, that is, damages should be compensatory, and their main purpose is to compensate or compensate for the damage suffered by the creditor due to breach of contract.

The principle of damages shall be to compensate the injured party for all the damages suffered due to the other party’s breach of contract. If one party improperly performs or fails to perform the contract, the other party will not only suffer the loss of reduced existing property, but also the loss of expected benefits. These losses deserve to be fully compensated.