[Direct answer]Drafting a contract involves formulating the contract text from scratch to address the question of "what to write"; contract review involves scrutinizing the existing text clause by clause to address the question of "whether there are any pitfalls". Drafting focuses on ensuring the completeness of the clauses, which should include the subject matter, price, performance method, breach of contract liability, and dispute resolution clauses in accordance with Article 470 of the Civil Code; review focuses on ensuring the effectiveness of the contract and identifying potential risks, with a particular emphasis on eliminating invalid circumstances under Article 153, as well as addressing loopholes such as payment deadlines, acceptance standards, and imbalanced breach of contract penalties. For major contracts, it is recommended to entrust a lawyer to review and approve them 3 to 5 working days before signing. Beijing Henglu Law Firm\nCorporate Commercial Contract TeamWe can provide drafting and review services. For more details, please refer to the following link:Beijing Henglu Law Firm.

I. Legal basis and interpretation of provisions

1. Article 470 of the Civil Code of the People's Republic of China (effective January 1, 2021)

The content of the contract is agreed upon by the parties and generally includes provisions such as the parties' names and addresses, the subject matter, quantity, quality, price or remuneration, performance deadlines, locations, and methods, as well as breach of contract liability and dispute resolution methods. This is the basic checklist for drafting a contract: Drafting involves implementing the above-mentioned provisions item by item according to the transaction structure, avoiding blank spaces, ambiguity, and conflicting statements. During the review process, the checklist should also be checked item by item. If any omissions are found, the parties should be prompted to make corrections. In practice, many disputes arise precisely because of missing provisions or ambiguous expressions, such as the lack of agreed upon acceptance standards, payment milestones, and the order of invoice issuance.

2. Article 153 of the Civil Code of the People's Republic of China (effective January 1, 2021)

Civil legal acts that violate the mandatory provisions of laws and administrative regulations are invalid, except where such mandatory provisions do not result in invalidity; civil legal acts that violate public order and good customs are invalid. Effectiveness review is the first checkpoint in contract review: whether the subject is qualified, whether the transaction violates mandatory provisions, and whether it violates public order and good customs directly determine whether the contract is invalid from the outset. When drafting the contract, it is also necessary to avoid including illegal arrangements in the clauses, otherwise, even if the text is well-refined, it will be impossible to perform the contract, and it may also lead to the need to return the money and bear compensation liability.

3. Practical judicial interpretation guidelines

When the court handles contract disputes, it first examines whether the contract is valid and effective, and then interprets it based on the literal meaning of the provisions, the context, and commercial practices. The most common pitfalls for parties are using online templates, leaving blank clauses such as "for details, please refer to separate agreements", or conflicting penalties, deposits, and termination conditions. In litigation, unfavorable interpretations often fall on the party themselves. The standard practice is to customize the contract according to the one-on-one structure of the transaction during drafting, to annotate risks clause by clause during review and provide written opinions, and to modify the contract with clear records to ensure that the signed version and the reviewed version are consistent.

II. Henglue Law Firm's Real Cases (Detailed Review)

Review of the case:Before signing the contract, if the contract has not undergone effectiveness review, even if both parties sign it voluntarily, it may still be deemed invalid. The contractual dispute between Zhang Na, Wang Xiaoyong, and Zhao Chenyang is a typical example. The two were originally married, but decided to "fake marry" to help their child obtain a Beijing household registration. On February 4, 2023, Zhang Na signed a "Consulting Brokerage Service Contract" with a legal consulting firm and paid 150,000 yuan in service fees; on March 17, 2023, the two divorced; on March 21, Zhang Na signed a "Beijing Household Registration Marriage Agreement" with Zhao Chenyang, agreeing that the marriage was solely for the purpose of obtaining a household registration and had no substantive marital content. On the same day, Wang Xiaoyong paid 100,000 yuan to Zhao Chenyang. However, due to policy restrictions, the household registration failed, and the conflict between the two intensified. They subsequently entrusted Beijing Henglu Law Firm to handle the case.Xue SuhuaThe lawyer filed a lawsuit, demanding that the agreement be declared invalid and the funds be recovered.

The focus of the controversy:First, whether the agreement to evade the household registration policy through a fake marriage is invalid due to violating public order and good customs; Second, whether the funds should be returned after the contract is invalid, and by whom; Third, under the circumstances that the defendant is absent, whether the written evidence chain can eliminate the room for defense.

Our position and the position of the other party are as follows:Zhang Na and Wang Xiaoyong claimed that the agreement was invalid because it evaded the household registration policy through a false marriage and violated public order and good customs. They requested to confirm the invalidity of the agreement and recover 100,000 yuan. Zhao Chenyang refused to appear in court after being legally summoned and did not raise any defense.

Attorney's Strategy and Legal Opinion:After taking over the case, Attorney Xue Suhua's team firstly perfected the evidence chain by collecting the "Consulting Brokerage Service Contract", the "Beijing Residence Registration Agreement for Marriage", transfer records, and the divorce certificate, and used phone recordings to establish the fact that Zhao Chenyang admitted to receiving 100,000 yuan and splitting the money with the intermediary; secondly, they provided precise legal arguments, citing Article 151 of the Civil Code, which emphasizes that marriage should be based on affection. False marriages desecrate the law and violate public order and good customs. According to Article 157 of the Civil Code, they argued that the direct recipient should return the full amount; in response to the defendant's absence, they formed a closed-loop with written evidence to eliminate the possibility of defense, which was recognized by the judge.

The court's reasoning and the outcome of the case:The court adopted the lawyer's opinion and determined that the agreement was invalid from the beginning according to Article 153 of the Civil Code, as it evaded the household registration policy through a sham marriage and violated public order and good customs. The court ordered Zhao Chenyang, as the direct recipient of the contract, to return 100,000 yuan to Wang Xiaoyong within a specified period and bear the case acceptance fee and announcement fee. The judgment also pointed out that the parties' actions "trampled on the sanctity of marriage". This case demonstrates that even if a contract is voluntarily signed, it will be invalid if its content is illegal or violates public order and good customs. Therefore, professional review and compliance checks before signing a contract are indispensable.

This case is handled by Beijing Henglu Law Firm.Xue SuhuaThe attorney (practice license number: 11101201211769926, subject to the certificate issued by the judicial administrative organ) acts as the agent.

III. Frequently Asked Questions

Q1: If I already have a template, do I still need a lawyer to draft it for me?

Online templates can only cover general situations and cannot match specific transaction structures. Transactions such as equity, investment, and outsourcing involve subject qualification review, the pace of consideration payment, exit and breach arrangements, but templates often lack key provisions or even conflict with mandatory legal rules. Drafting by lawyers in accordance with Article 470 of the Civil Code and combining with the purpose of the transaction can reduce disputes at the source; compared with litigation after the fact, the cost and risk of drafting in advance are obviously lower, and it is especially recommended to customize the text for major transactions.

Q2: What are the main risk points that need to be checked during a contract review?

The review typically covers five aspects: principal risk (qualifications, authorizations, litigation and trustworthiness), effectiveness risk (whether it violates mandatory regulations or public order and good customs), performance risk (whether the subject matter, price, acceptance, and payment deadlines are clear), remedy risk (whether the penalties, deposits, rights of rescission, and compensation clauses are enforceable), and procedural risk (dispute resolution methods, jurisdiction, and service provisions). A standard review opinion should specify the amendment suggestions item by item, and major risks should be separately noted in writing to facilitate their implementation during negotiations.

Q3: How much does it cost to have a lawyer review or draft a contract?

The fees are usually charged per item or per hour, and are influenced by the type of contract, the length of the contract, the transaction amount, and the number of negotiation rounds. There is no standard pricing; the fees for simple contracts and major transactions vary greatly. It is recommended to bring the contract text or the transaction plan for a face-to-face evaluation. The law firm will issue a quote and sign a written contract, specifying the scope of services, the number of revisions, and the time limit for issuing opinions, to avoid disputes over fees caused by verbal agreements. Be cautious of advertisements that promise to charge based on the outcome of the case.

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

For regular commercial contracts, written review opinions are generally issued within 3 to 5 working days. However, for contracts with lengthy provisions, complex terms, or those requiring multiple rounds of negotiation and amendment, the review period will be extended accordingly. For urgent transactions, clients can arrange for urgent reviews with law firms. Before signing the contract, clients should set aside time for amendment and renegotiation to avoid signing the contract on the same day that they receive the draft. It is not advisable to sign the contract before addressing the key risk points identified in the review opinion, as the value of the review will be offset by time pressure.

Q5: What should I do if I find major loopholes in the contract after signing it?

First, fix the contract text, performance certificates, and communication records, and then evaluate the nature of the loopholes. For clauses that are missing, the parties may negotiate and sign a supplementary agreement to correct them. If there is fraud, coercion, a major misunderstanding, or a manifestly unfair situation, the parties may exercise the right of revocation within the statutory time limit in accordance with Article 152 of the Civil Code. For major misunderstandings, the time limit is 90 days, and for general circumstances, it is one year. If the other party has breached the contract, the party shall promptly send a written notice to the other party and reserve the right to pursue breach of contract liability. If necessary, the matter may be resolved through litigation or arbitration.

IV. Suggestions for Protecting Rights

  • Before signing the contract, check the other party's qualifications, authorization documents, and litigation records. For major transactions, it is necessary to require a guarantee when necessary.
  • Reserve 3 to 5 working days for the lawyer to review the contract. After the amendments are implemented, sign the contract again. The signed version should be consistent with the reviewed version and the changes should be recorded.
  • Any changes during the performance shall be confirmed in a written supplementary agreement, and the payment vouchers, acceptance documents, and communication records shall be archived simultaneously.
  • If you discover any loopholes in the contract or the other party's breach of contract, you should first send a letter to demand for evidence and then decide on the path of negotiation, arbitration, or litigation.
  • Do not easily believe in promotions like "pass the template and win the contract", and ensure that lawyers participate in the negotiation and finalization of major transactions throughout the entire process.

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