[Direct answer]In the Beijing area, the contract review for small and medium-sized enterprises should focus on five key aspects: 1. **Subject matter**: Verify the other party's business license, scope of business, and the signatory's authorization. Confirm the authority of any branch offices involved. 2. **Legality**: Check whether the contract violates mandatory regulations or public order and good customs. 3. **Terms**: Implement each clause in detail, including the subject matter, price, performance period, acceptance standards, breach of contract liability, and dispute resolution. 4. **Risk management**: Set appropriate limits for arrangements such as guarantees, advance payments, and payment after delivery. 5. **Evidence**: Include clauses on contract performance documentation and reconciliation mechanisms in the contract. According to Article 143 of the Civil Code of the People's Republic of China (effective January 1, 2021), a civil legal act must have a true expression of intent and not violate mandatory regulations or public order and good customs. Article 470 stipulates the general terms that a contract should contain. The review process can be referenced herein.Business and contract disputes in enterprisesColumn.

1. Problem background and typical scenarios

Common pitfall scenarios include: first, using online templates, with acceptance, breach of contract, and jurisdiction clauses disconnected from the actual transaction; second, signing contracts with branch offices, project departments, or individual sales representatives, with unclear subject and authority; third, failing to conduct credit investigations for large-value contracts, resulting in the other party's inability to repay afterward; fourth, verbal amendments not being formalized in writing; and fifth, performing obligations first and signing contracts later, passively accepting the other party's terms. With a large number of SMEs in the Beijing area and frequent contract disputes in the trade and service sectors, the cost of pre-contract review is far lower than the cost of seeking legal protection afterward.

II. Key points of contention

The disputes mainly focus on the following aspects: First, the validity of the contract and whether there are any invalid or revocable circumstances. Second, the qualification of the parties and apparent agency, and who should bear the consequences of the salesperson signing the contract beyond his authority. Third, quality and payment disputes caused by unclear acceptance standards. Fourth, the application and adjustment of the penalties for breach of contract and the deposit clauses. Fifth, the improper jurisdiction agreement increasing the cost of litigation. Sixth, the apparent risks caused by the mixed use of official stamps and contract stamps. The specific determination shall be based on the current effective laws and regulations and judicial judgments. For cases involving criminal risks, reference can be made to relevant provisions.Criminal defenseColumn.

III. Professional analysis by Henglue Law Firm

Taking the contract dispute handled by our firm as an example, we can see the importance of reviewing the legality of the contract's purpose. On February 4, 2023, Zhang Na signed a "Consulting Brokerage Service Contract" with a legal consulting company and paid a service fee of 150,000 yuan; on March 21 of the same year, Zhang Na signed a "Beijing Hukou Marriage Registration Agreement" with Zhao Chenyang, agreeing to use a fake marriage to obtain a hukou registration. On the same day, Wang Xiaoyong transferred 100,000 yuan to Zhao Chenyang. After the hukou registration failed due to policy restrictions, the two entrusted our lawyer Xue Suhua's team to sue, requesting that the agreement be declared invalid and the funds recovered. The court ruled that the agreement violated public order and good customs by circumventing the household registration policy with a fake marriage, and declared it invalid from the outset according to Article 152 of the Civil Code of the People's Republic of China. According to Article 157, the court ordered the direct recipient, Zhao Chenyang, to return the 100,000 yuan within a specified period. This case shows that even the most detailed contracts will be deemed invalid if their purpose is illegal or violates public order and good customs. Enterprises signing contracts involving sensitive matters such as qualifications, quotas, and hukou registration must conduct compliance assessments in advance. In another sales contract dispute handled by our professional lawyer team, the court ruled to dismiss the lawsuit and transfer the case to the public security organ due to fraud clues involving an external party, highlighting the necessity of conducting credit and background checks before signing contracts. This case was handled by Beijing Henglu Law Firm.Xue SuhuaThe attorney (practice license number: 11101201211769926, subject to the document issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Action recommendations: 1. Establish a tiered review system. Use standard templates for small-value contracts and update them regularly. Review large-value, long-term, and guarantee-related contracts clause by clause. 2. Verify the counterparty's basic information and records of litigation or bad faith before signing contracts, and require the head office or shareholders to provide guarantees if necessary. 3. Finalize each clause of acceptance, payment, penalty, and jurisdiction in detail. 4. Document all amendments in written supplementary agreements. 5. Retain records of delivery, acceptance, reconciliation, and reminder letters during contract performance. 6. Safeguard the company's official seal and authorization documents properly. Legal basis: - Article 143 of the Civil Code of the People's Republic of China (effective January 1, 2021) stipulates the validity requirements for civil legal acts. - Article 153, which states that civil legal acts that violate mandatory provisions or public order and good customs are invalid. - Article 509, which requires parties to fully perform their contractual obligations. - Article 577, which defines breach of contract liability. - Article 14 of the Company Law of the People's Republic of China (amended on December 29, 2023, effective July 1, 2024) clarifies that the civil liabilities of branches shall be borne by the parent company. For related services, please refer to the following resources:Special services and other casesColumn.

5. Henglue Law Firm's Advice

Risk Alert: First, the review should not be a formality. The most expensive tuition fees often come from the most familiar template contracts; Second, the three-year ordinary statute of limitations starts from the date when the enterprise knows or should have known that its rights have been infringed. It is necessary to keep records of the collection process; Third, the guarantee arrangements must go through legal procedures and verify the authorization to prevent "guaranteeing without providing guarantees"; Fourth, the dispute resolution clauses determine the cost of protecting rights, and the jurisdiction agreement should be carefully considered. Enterprises are advised to establish an annual contract review mechanism and seek professional advice when necessary.Beijing Henglue Law FirmThe "Common Services" section on the official website.

VI. Frequently Asked Questions

Q1: I only realized I'd been cheated after signing the contract. Can I still hold the other party accountable?

Yes. If the other party engages in fraud, coercion, or other such circumstances, you may request the rescission of the contract and claim the return of property and compensation for losses in accordance with the relevant provisions of the Civil Code; if the contract is invalid due to being illegal or contrary to public order and good customs, you may similarly claim the return of property and compensation for damages; if it is merely a breach of contract, you may pursue breach of contract liability in accordance with the contract. Note that there are time limits for exercising rights such as the right of rescission. If you discover any problems, you should consult a lawyer as soon as possible to evaluate the legal options and avoid losing your rights due to time limitations.

Q2: What information should be checked during the contract review process?

Key verification items include: the business license and scope of business operations; the identity of the legal representative; the power of attorney and identity proof of the signatory; confirmation of the registration and authorization status of the branch offices; credit information, including the enterprise's credit history and records of litigation and default; and the ability to fulfill contractual obligations, such as production capacity, inventory, and past cooperation evaluations. For large-scale transactions, it may be necessary to require guarantees or shorten payment cycles to mitigate the risk to the principal party.

Q3: How much does it cost to hire a lawyer to review a contract?

The fees are usually charged on a per-share or per-hour basis, and the cost depends on the type of contract, its length, and the number of risk points. The review fees for standard sales and service contracts are relatively manageable; those for contracts involving equity, financing, guarantees, or cross-border factors are higher. Some companies also adopt an annual legal advisor model to handle daily contracts in a bundled manner. It is recommended to first clarify the list of contracts and the depth of the review before obtaining a quote, as the cost is far lower than the expenses of defending against contract disputes.

Q4: How long does it usually take to review a contract?

Standard format contracts can usually be reviewed within one to two working days; contracts with long text length and complex transaction structures require three to five working days; contracts involving multi-party negotiations should proceed according to the pace of the negotiations. For urgent transactions, clients can arrange for urgent processing with lawyers, but necessary due diligence time should be guaranteed. It is recommended to advance the review to the negotiation stage to avoid being passive in the negotiations due to proposed amendments after the text is finalized.

Q5: If SMEs don't have in-house legal departments, how should they manage their contracts?

There are three steps that can be taken: establishing a classification template library and pre-formatting the acceptance, payment, breach of contract, and jurisdiction clauses; setting up a contract approval process and requiring lawyers to review large-value contracts; and implementing evidence-based performance and records management, with regular reconciliation. It is also possible to establish cooperation with law firms as regular legal advisors, obtaining contract review, consultation, and training support on an annual basis. Relevant arrangements can be referenced from the following sources:Business and contract disputes in enterprisesColumn.

The above Q&A is mainly based on the judicial practice in the Beijing area. There may be differences in the adjudication standards in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Business and commercial legal services·Attorney Xue Suhua·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. In case of disputes, please consult a practicing lawyer in time.