Legal basis: Article 502 of the General Principles of the Civil Law of People's Republic of China (PRC) * * * A contract established in accordance with the law shall come into effect upon its establishment, unless it is otherwise stipulated by law or agreed by the parties. In accordance with the provisions of laws and administrative regulations, if the contract should go through the approval procedures, such provisions shall prevail. If the failure to go through the formalities such as approval affects the effectiveness of the contract, it will not affect the performance of the obligation clauses such as approval and the effectiveness of relevant clauses in the contract. If the party that should go through the formalities for approval fails to perform its obligations, the other party may require it to bear the responsibility for violating its obligations. The modification, assignment and dissolution of a contract shall be subject to the provisions of laws and administrative regulations, and the provisions of the preceding paragraph shall apply and shall be subject to approval.
Article 503 A contract without agency shall be ratified by the principal. The agent has no right to conclude a contract in the name of the principal, and if the principal has started to perform the contractual obligations or accepted the performance of the counterpart, it shall be regarded as ratification of the contract.
Article 504 A contract concluded by the legal representative of a legal person or the person in charge of an unincorporated organization exceeds its authority, unless the other party knows or should know that it has exceeded its authority, the representative's behavior is valid, and the contract concluded is valid for the legal person or unincorporated organization.