[Direct answer]In the Beijing area, contracts signed under fraudulent circumstances are revocable contracts, and the right of revocation must be exercised within the statutory exclusion period. According to Article 148 of the Civil Code of the People's Republic of China (effective January 1, 2021), if a party uses fraudulent means to make the other party perform a civil legal act against their true intention, the party who has been deceived has the right to request the people's court or arbitration institution to revoke it; Article 152 stipulates that the party who has been deceived shall exercise the right of revocation within one year from the date when he/she knows or should know the grounds for revocation. If the right of revocation is not exercised within the time limit, it shall be extinguished. If the party is coerced, he/she shall claim within one year from the date when the coercive act ceases. After the revocation, the contract shall be invalid from the beginning, and the party may request the return of the property and compensation for losses. For referenceBusiness and contract disputes in enterprisesColumn.

1. Problem background and typical scenarios

These types of questions are commonly encountered in several situations: First, the other party conceals major defects or the true situation of the subject matter, such as concealing the history of equipment failure or the situation of the house being sealed up and mortgaged; Second, the other party misrepresents its qualifications, achievements, or performance to induce the signing of the contract; Third, in sales and investment contracts, it is found that the other party is suspected of contract fraud, with civil fraud and criminal fraud intertwined; Fourth, in franchise and agency contracts, the franchisor exaggerates the profit prospects and misrepresents the number of stores; Fifth, when signing the contract, the signer is impersonated or the documents are forged, and it is only later that the signer discovers the existence of the contract. When handling similar cases in the Beijing area, it is necessary to first determine whether it is civil fraud or criminal fraud, as the approaches to dealing with them are very different. For criminal cases, reference can be made to relevant provisions of the Criminal Law of the People's Republic of China. 这种疑问常见于以下几种情况：一是对方隐瞒标的物重大瑕疵或真实状况，如隐瞒设备故障史、房屋查封抵押情况；二是虚构资质、业绩或履约能力诱导签约；三是买卖、投资合同中发现对方涉嫌合同诈骗，民事欺诈与刑事诈骗交织；四是加盟、代理合同中特许人夸大盈利前景、虚报门店数量；五是签约时被冒名、被伪造文件，事后才发现合同存在问题。北京地区在处理类似案件时，需要先辨别是民事欺诈还是刑事诈骗，两者的处理方式截然不同，涉刑情况可参考《中华人民共和国刑法》相关条款。Criminal defenseColumn.

II. Key points of dispute

Focus One: The constitution of fraud requires that the other party intentionally fabricates facts or conceals the truth, and causes the other party to enter into a contract under a mistaken understanding. Focus Two: The calculation of the one-year revocation period begins from the date when the revoking party knows or should have known about the grounds for revocation. Failure to discover the facts does not automatically extend the time limit. Focus Three: In the case of fraud committed by a third party, according to Article 149 of the Civil Code, the revoking party must know or should have known about the fraudulent act in order to revoke the contract. Focus Four: The distinction between civil fraud and criminal fraud. Cases involving suspected economic crimes may be ruled to have their prosecutions dismissed and referred to the public security organ. Focus Five: The distinction between revocation and contract invalidity. Contracts that violate mandatory provisions or public order and good customs are directly invalid. Focus Six: The determination of the scope of restitution and compensation after revocation. Specifically, the current effective laws, regulations, and judicial rulings shall prevail.

III. Professional analysis by Henglue Lawyers

Taking a sales contract dispute handled by our firm as an example, we can observe the handling of fraud suspicions and the intersection of civil and criminal law. Company A signed a "Book Supply Contract" with Company B, but Company B defaulted on the payment of over 8.35 million yuan. Company A then signed a "Maximum Amount Mortgage Contract" with Liu *. Liu * provided a maximum amount mortgage guarantee of 14 million yuan with real estate. Liu * claimed that his signature was forged by Company B and the third party C Company, who carried out a fraudulent scheme under the guise of "real estate mortgage cooperation". The C Company fraud case has been registered by the public security organ, involving more than 20 victims, a total amount of 200 million yuan, and more than 50 sets of real estate. After studying the case, our lawyer team pointed out that whether Liu * was deceived directly affects the validity of the mortgage contract, which needs to be determined by criminal investigation. Moreover, many courts have ruled to dismiss the lawsuit in similar cases due to suspected criminal activities. In the end, the court ruled to dismiss Company A's lawsuit and transfer the materials to the public security organ in accordance with Article 11 of the "Regulations of the Supreme People's Court on Several Issues Concerning Economic Crimes in the Trial of Economic Disputes". In another contract dispute, the "fake marriage" household registration agreement signed by Zhang Na, Wang Xiaoyong, and Zhao Chenyang was confirmed to be invalid by the court in accordance with Article CLIII of the Civil Code for violating public order and good customs, and the parties were ordered to return 100,000 yuan. Two cases remind us that contracts signed under deception may not necessarily follow the path of rescission. Those involving criminal activities should strive to transfer the case to the investigation organ for further investigation. Contracts that violate public order and good customs should be directly claimed to be invalid. 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 suggestions: First, immediately fix the evidence after being cheated, including contracts, promotional materials, chat records, transfer certificates, and comparison materials of the other party's fabricated facts; Second, record the time node of knowing that you have been cheated to ensure that there is evidence to check within the one-year exclusion period; Third, simultaneously assess whether it involves criminal offenses, and report the case to the public security organ and provide clues if it involves fraud; Fourth, when claiming revocation, also request the return of property and compensation for losses; Fifth, if the contract also violates public order and good customs or mandatory provisions, it can be claimed as invalid, without being subject to the one-year time limit. The relevant procedures can be referred to for reference.Business and contract disputes in enterprisesThe column. In terms of legal basis, Articles 148 and 149 of the Civil Code of the People's Republic of China (effective on January 1, 2021) stipulate that civil legal acts implemented under fraud can be revoked, Article 152 stipulates the one-year exclusionary period and the maximum five-year protection period for the right of revocation, and Article 157 stipulates the return and compensation after revocation; Article 11 of the "Provisions of the Supreme People's Court on Several Issues Concerning Economic Crimes Suspected in the Trials of Economic Disputes" (issued on April 21, 1998) stipulates that those suspected of economic crimes shall be adjudged to dismiss the lawsuit and transfer the case to the public security organ.

5. Henglu Law Firm's Advice

Risk Alert: First, the one-year statute of limitations does not suspend or interrupt, and delaying action will result in the loss of rights. It is essential to initiate litigation or arbitration as soon as possible. Second, the "should have known" period also applies. If suspicious signs are ignored for a long time, it may be deemed that the party knew about them. Third, the burden of proof for fraud lies with the claimant. Mere post-event losses or regrets are not sufficient to establish fraud. Fourth, in cases involving contract fraud, it is not advisable to forcibly proceed with civil litigation. The correct approach is to cooperate with the transfer of the case to the investigation department or to report the case to the police first. Fifth, revocation only addresses the issue of contract validity. Recovering losses still depends on the enforcement of property restitution and compensation. It is recommended to seek legal advice as soon as possible.Beijing Henglue Law FirmOn the official website, in the same category, evaluate the evidence and the pathway.

VI. Frequently Asked Questions

Q1: Is the time limit for revoking a contract signed under fraud one year?

Yes. According to Article 152 of the Civil Code, the party who has been deceived shall assert the right to rescind the contract within one year from the date when he/she knows or should have known about the grounds for rescission. If the right to rescind is not exercised within the time limit, it will be extinguished. This period is a preclusive period and will not be interrupted by continuous negotiations or reminders. If the right to rescind is not exercised within five years from the date of the conclusion of the contract, the right to rescind will also be extinguished. After discovering that he/she has been deceived, the party should immediately fix the evidence and initiate the procedure, and should not waste time on repeated negotiations.

Q2: What evidence do I need to prepare to claim fraudulent rescission?

The key is to prove "intentional deception" and "signing a contract due to deception": First, evidence of the other party fabricating facts or concealing the truth, such as false advertising, forged documents, and records of exaggerated promises; Second, evidence that the other party led the party to a mistaken understanding, such as the payment and contract signing process based on lies; Third, materials from the contract process, including contract texts, chat records, and audio recordings; Fourth, evidence of losses, such as transfer receipts and financial records. The more complete the chain of evidence is, the more powerful the claim for revocation will be.

Q3: How much does it cost to litigate against a contract signed under deception?

The main costs include case acceptance fees and attorney's fees. Where the suit for rescission also claims the return of property and compensation for losses, the acceptance fees shall be charged in accordance with the amount of the litigation request; where only the rescission of the contract is requested without involving the payment of property, the fees shall be charged on a per-case basis. The attorney's fees shall be determined through consultation based on the organization of evidence and the complexity of the case, and there is no uniform standard. If the case involves criminal fraud and is transferred to the public security organ, the criminal prosecution procedures shall not be borne by the parties. It is recommended to consult first and then make a budget based on the subject matter and the status of the evidence.

Q4: How to distinguish between contract fraud and civil fraud?

Civil fraud is aimed at inducing transactions, and the contract still has a basis for performance. The party deceived can request the court to revoke the contract and have the case heard by the court; criminal fraud is aimed at illegal possession, and situations such as fictitious entities and disappearance of funds are suspected of contract fraud. According to Article 11 of the "Interpretation of the Supreme People's Court on Several Issues Concerning Economic Crime Suspicions in the Trials of Economic Disputes Cases", if the court finds that the case does not belong to an economic dispute but involves economic crime suspicions after the trial, the court shall rule to dismiss the suit and transfer the case to the public security organ for investigation. The qualification of the case shall be determined by the investigation and adjudication.

Q5: How should I handle a contract signed under fraudulent circumstances?

The first step is to seal the contractual evidence and record the time when the victim discovered being cheated; the second step is to assess whether it constitutes civil fraud or criminal fraud; the third step is to initiate a lawsuit or arbitration request for rescission within one year through civil channels, and to claim restitution and compensation; the fourth step is to report the case to the police first, cooperate with the court's transfer of the case, or assert rights according to the criminal restitution procedure; the fifth step is to apply for property preservation to prevent the transfer of the other party's assets, which can be referred to for reference.Business and contract disputes in enterprisesColumn.

The above content is based on the judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglue Law Firm for specific cases.

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 public 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. If a dispute arises, please consult a practicing lawyer in time.