[Direct answer]The focus of enterprise contract review is on eight types of clauses: subject qualification and signature authority, subject matter and quality standards, price and payment milestones, performance period and method, acceptance standards and objection period, breach of contract liability and termination conditions, dispute resolution methods, and guarantee and confidentiality of intellectual property agreements. According to Article 470 of the Civil Code (effective January 1, 2021), the content of a contract generally includes the parties' information, subject matter, quantity, quality, price, performance period, location and method, breach of contract liability, and dispute resolution methods; Article 509 requires full performance in accordance with the contract, and Article 577 establishes the baseline for breach of contract liability. The key point of the review is not to correct typos, but to preemptively lock in the three high-frequency risks of payment, acceptance, and breach of contract. For reference, please refer to the following materials:Legal services for corporate commercial and contract disputes, or throughBeijing Henglu Law FirmObtain the review checklist.

1. Problem background and typical scenarios

From procurement, outsourcing, and leasing to investment and franchising, almost every transaction in a business is governed by contracts. In practice, the most common scenarios of inadequate contract review include: directly using online templates or contract formats provided by the other party; verbal commitments that are not put in writing, with acceptance criteria simply stated as "quality meets standards"; entirely absent or imbalanced breach of contract liabilities; complete ignorance of the contracting party's equity structure and qualification certificates; and ambiguous dispute resolution clauses that lead to jurisdiction becoming the first battle in a legal dispute. Only after a problem arises do people look back at the contract, only to find that key provisions are either missing or misdirected.

II. Key points of contention

  • Acceptance and quality standards: If the standards are not quantified, everyone will have their own interpretation of "passed"; whether the payment milestones are tied to acceptance or to signing the contract directly affects who will breach the contract first. For outsourcing contracts, it is also necessary to specify the number of revisions and the responsibility for delays.
  • Breach of contract and stop-loss provisions: When there are no penalties for breach of contract and no interest agreements, the losses must be proven through subsequent evidence; the conditions for termination are vague, and people want to stop losses but worry that they might actually breach the contract themselves.
  • Subject and Guarantee: Whether the shareholders of a one-person company are jointly and severally liable, who to seek compensation from after the company is dissolved, and whether the legal representative or related companies need to provide guarantees. If these issues are not addressed during the contract signing, there will be no legal basis for debt collection, so these issues should be considered comprehensively during the contract negotiation process.Legal services for creditor-debtor disputes and enforcement casesPredict the execution path in advance.

III. Professional analysis by Henglue Law Firm

A single investment contract dispute is sufficient to demonstrate the importance of contractual provisions. Xu * signed a "Transfer of Profit Rights Agreement" with a certain company, investing in a film claimed to have a total value of 120 million yuan and acquiring 0.25% of the film's profit rights with a capital contribution of 300,000 yuan. The agreement explicitly stipulated that the film must be released before December 31, 2022, otherwise all investment funds would be refunded. In January 2021, Xu * transferred 300,000 yuan, but the film was still not released by 2024. After signing the contract, it was discovered that the company was not the actual production company; at the time of signing, Liu * was the sole shareholder of the company, but later the shareholders were changed to Zhang * and Zhao *. In July 2022, the company was liquidated, and the two parties issued a "Promise Letter from All Investors" promising to settle all creditor's rights and debts. Xu * entrusted lawyer Wang Dong to sue the three defendants. The lawyer pointed out that the agreement was legally valid, but the release commitment was not fulfilled and the contractual purpose was frustrated, so Xu * had the right to rescind the contract and demand the return of investment funds and compensation for the loss of funds. Liu *, as the sole shareholder at the time of signing, failed to prove that the company's assets were independent of his personal assets and should bear joint and several liability. Zhang * and Zhao *, who promised to complete the liquidation, should bear the responsibility for unpaid debts. The first-instance court ordered the three defendants to jointly repay 300,000 yuan and lawyer's fees, etc. The second-instance court dismissed the appeal and maintained the original judgment, applying Article 566 of the Civil Code, Article 63 of the Company Law, and Article 20 of the Second Judicial Interpretation of the Company Law. What truly "rescued" the client in this case were two key arrangements from the review perspective - the triggering conditions for refunds and the chain of liability subjects; while the subject defect of "the company was not the production company", could have been detected before signing the contract. In another case, the parties signed a "fake marriage" settlement agreement with an outsider to obtain household registration and paid 100,000 yuan, but the registration failed. The court ruled that the agreement violated public order and good customs by evading household registration policies with a false marriage and was invalid from the outset, ordering the direct recipient to return the 100,000 yuan (represented by Lawyer Xue *'s team) - the effectiveness red line is a veto in the review process. No matter how meticulous the contractual provisions are, they cannot save an invalid contract.

IV. Practical suggestions and legal basis

Legal basis: Article 470 of the Civil Code (effective January 1, 2021) stipulates general contract terms, Article 490 provides that the contract is concluded when the parties sign, stamp, or affix fingerprints, Articles 509 and 577 remain unchanged, and Articles 563 and 566 regulate statutory rescission and its consequences; Article 23 Paragraph 3 of the Company Law (amended on December 29, 2023 and effective July 1, 2024) stipulates that shareholders of single-member companies who cannot prove the independence of the company's assets shall bear joint and several liability for the company's debts; Article 20 of the Supreme People's Court's Interpretation on Several Issues Concerning the Application of the Company Law of the People's Republic of China (effective May 19, 2008) stipulates the liability for deregistration without liquidation or when shareholders promise to pay off debts. Practical suggestions: Verify the business license, qualification certificates, equity structure, and litigation records before signing the contract; quantify the three sets of clauses (payment, acceptance, and breach of contract) one by one; include guarantees from the legal representative or related companies in the contract as needed; institutionalize contract filing and performance tracking systems, and conduct daily reviews by authorized personnel.Corporate legal advisory servicesUnified coverage.

5. Henglu Law Firm's Reminder

The value of contract review lies in "avoiding disputes" rather than just "resolving disputes through litigation". A well-reviewed contract should ensure that the payment milestones and acceptance standards are aligned, the breach of contract liabilities and loss proofs are matched, and the guarantors' solvency corresponds to their repayment capabilities. If the contract is reviewed only after a dispute arises, the cost of inadequate review will translate into litigation expenses. The above-mentioned film investment case was handled by Beijing Henglu Law Firm.Wang DongThe lawyer (practice license number: 11101201910090334, subject to the document issued by the judicial administrative organ) acts as the agent. In both the first and second instance, the investment amount of 300,000 yuan was recovered. If you have important contracts to sign, it is recommended to complete a systematic review before signing the contract.

Q1: Can I sign the standard contract provided by the other party directly?

It is not recommended to sign the contract directly. The focus should be on checking four types of content: exemption clauses and limitation of liability, jurisdiction and arbitration clauses, acceptance and payment conditions, and breach of contract liability. According to Article 496 of the Civil Code, the party providing the standard terms has the obligation to give a warning and explanation to the other party regarding the terms that are of great interest to the other party. If this obligation is not fulfilled, the other party may claim that the term does not become part of the contract. Article 497 stipulates that the standard terms that unreasonably exempt the party's own liability, increase the other party's liability, or exclude the other party's main rights are invalid. If unfavorable terms are found, efforts should be made to obtain equivalent terms through amendments or supplementary agreements, rather than simply accepting them in a hurry to close the deal.

Q2: If the contract is only signed by an individual but not stamped, is it still valid for the company?

It depends on the specific circumstances. According to Article 490 of the Civil Code, either a signature, a stamp, or a thumbprint is sufficient to establish a contract. If the legal representative or an authorized person signs on behalf of the company, the contract will be binding on the company. Article 504 stipulates that if the legal representative exceeds his authority in signing a contract and the counterparty acts in good faith, the representative's actions will be valid. However, if an ordinary salesperson signs without authorization and the company does not subsequently ratify the contract, it may not constitute apparent agency. It is safer to require the company to affix its official seal and have the legal representative sign the contract, while verifying the signatory's identity and the authorization documents.

Q3: If there's no penalty clause in the contract, how will the other party compensate for breaching the contract?

Claims can still be made. According to Articles 577 and 584 of the Civil Code, the breaching party shall compensate for the losses caused by the breach of contract, including the benefits that could be obtained after the performance of the contract, but not exceeding the scope that could be foreseen at the time of signing the contract; for monetary debts that are overdue, the claimant may claim interest losses. If the sales contract does not stipulate a penalty for late payment, the claimant may claim according to the LPR plus 30%-50%. Compared with the agreed penalty, claiming for losses requires the contract-abiding party to provide evidence, such as invoices, reminder letters, and proof of profits and alternative transactions. It is recommended that the subsequent contract include clauses on penalty and attorney's fees.

Q4: Do the content agreed upon in WeChat count as contract terms?

Yes. According to Article 469 of the Civil Code, written forms include electronic data exchange, emails, and other data messages that can tangibly represent the content contained therein and be retrieved and used at any time. WeChat chat records and email exchanges all fall into this category. In judicial practice, WeChat records can be used as evidence to determine contractual relationships and amendments to agreements, but they must meet three requirements: verifying the identity of the other party (real name information, job authority), preserving the original carrier, and ensuring the content is complete and unaltered. For important transactions, it is recommended to promptly formalize the consensus reached on WeChat into a written contract or confirmation letter to avoid difficulties in providing evidence after the evidence is lost.

Q5: How long does it usually take to review a contract, and what's the most cost-effective way to do it?

Regular business contracts can usually be delivered for review within several working days. For urgent matters, clients can arrange for expedited review and response deadlines with lawyers, subject to the specific provisions of the contract. There are three cost-effective approaches: creating a lawyer-reviewed template library for frequently used procurement, sales, and outsourcing contracts, which significantly reduces the cost of a single signing; hiring a long-term consultant to provide unified daily review services; and separately commissioning specialized reviews for major transactions and requiring written risk warnings to be issued. It is crucial not to sign contracts without legal review for the sake of saving small review fees, as the losses from a single dispute often exceed the cost of years of review.

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