[Direct answer]In the Beijing area, it is necessary, but the focus is on graded review rather than word-by-word scrutiny. Article 143 of the Civil Code of the People's Republic of China (effective January 1, 2021) stipulates that a civil legal act is valid if the actor has the corresponding civil capacity, the expression of intent is genuine, and it does not violate the mandatory provisions of laws and administrative regulations or go against public order and good customs. Article 153, on the other hand, stipulates that a civil legal act that violates mandatory provisions or goes against public order and good customs is invalid. If enterprises complete subject credit verification, clause review, and signing authority confirmation before signing contracts, they can significantly reduce subsequent disputes and losses. It is recommended to grade contracts according to their amount and risk, and to submit all major contracts for review.

1. Problem background and typical scenarios

SMEs often use a template that has been in circulation for many years when signing contracts. The clauses are provided by the other party, and once the price is agreed upon, they simply sign and stamp the contract. Common scenarios include: purchase contracts only listing the name of the goods and the total price, with the acceptance standards and the objection period left blank; sales contracts stipulating payment upon delivery, but lacking provisions on retention of ownership and interest on overdue payments; service outsourcing contracts that fail to mention the standard of deliverables or the ownership of intellectual property; and major arrangements such as franchising, agency, and guarantees being signed by business personnel on their own. Only when disputes arise do they realize that there are no enforceable remedies in the contract, or even that there are problems with the other party's legal qualifications.

II. Key points of dispute

First, what level of review is required? Manually reviewing every word of a contract would be too costly in practice. Instead, contracts should be graded based on their contract amount, duration, and whether they involve guarantees or intellectual property rights. Major contracts should be subject to focused review, while standard contracts can use pre-reviewed templates. Second, where do the risks of contract validity lie? In addition to ensuring the authenticity of the parties' intent, it's also important to verify whether the business qualifications, administrative licenses, bidding and tendering procedures, and decision-making processes for related-party transactions are complete. Validity defects are often harder to remedy than unfavorable contract clauses. Third, who has the authority to sign the contract? If unauthorized personnel sign the contract, it may lead to disputes over agency. Enterprises should establish authorization and seal-use systems. Fourth, who is responsible for contract performance management? Contract management doesn't end with signing—delivery, acceptance, reconciliation, and reminder processes all require documentation at four key stages.

III. Professional analysis by Henglue Lawyers

The first gateway to contract review is the validity of the contract. A contract dispute handled by Henglue Law Firm illustrates this point well: Zhang Na and Wang Xiaoyong were once married. To help their child obtain a Beijing household registration, they decided to use a fake marriage to settle in Beijing. In February 2023, they signed a "Consulting Brokerage Service Contract" with a legal consulting company and paid 150,000 yuan in service fees. On March 17 of the same year, they got a divorce. On March 21, Zhang Na signed a "Beijing Household Registration Marriage Settlement Agreement" with Zhao Chenyang, stipulating that the marriage was solely for the purpose of helping her settle in Beijing and did not involve a real marriage. On the same day, Wang Xiaoyong paid 100,000 yuan to Zhao Chenyang. However, due to policy restrictions, the household registration failed, and the two parties' conflicts intensified. They subsequently entrusted Beijing Henglue Law Firm to handle the case.Xue SuhuaThe lawyer team filed a lawsuit, requesting to confirm the invalidity of the agreement and recover the funds. The defendant, Zhao Chenyang, refused to appear in court and did not raise any defenses. The lawyer team approached the case from two angles: Firstly, they completed the evidence chain by collecting the Consultation Intermediary Service Contract, the Beijing Household Registration Marriage Registration Agreement, transfer records, and the divorce certificate. They also recorded Zhao Chenyang's admission of receiving 100,000 yuan and splitting the money with the intermediary through phone recordings, and used the civil mediation document to corroborate this operation mode. Secondly, they conducted legal argumentation, claiming that evading the household registration policy through a false marriage violates public order and good customs. The court accepted the lawyer's opinion, determined that the agreement was invalid from the outset in accordance with Article 152 of the Civil Code of the People's Republic of China, and ordered Zhao Chenyang, the direct recipient of the funds, to return 100,000 yuan within a specified period in accordance with Article 157, while also bearing the acceptance fees and announcement fees. 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. It can be seen that even if the two parties sign the contract voluntarily, the content of the contract is illegal or contrary to public order and good customs, which is also invalid. Therefore, the enterprise must first check the validity of the contract before reviewing it.

IV. Practical suggestions and legal basis

It is recommended to establish four basic systems: 1. Contract grading and review lists, clearly defining which contracts must be reviewed by lawyers and which can use standard templates; 2. Pre-contract subject and qualification verification, checking business licenses, operating scopes, permits, legal representative identities, and authorization documents; 3. Authorization and seal management, clarifying signing authority and approval processes to prevent business personnel from making commitments beyond their authority; 4. Performance records and traceability, fixing four key points—delivery, acceptance, reconciliation, and reminders—as written materials. This is in accordance with the provisions of Article 143 of the Civil Code of the People's Republic of China (effective January 1, 2021) regarding the effective conditions of civil legal acts, Article 153, regarding the circumstances of invalidity, Article 157, regarding the consequences of invalidity, Article 469, regarding the written form, Article 509, regarding full performance and the principle of good faith, as well as the provisions of the Company Law of the People's Republic of China (amended on December 29, 2023, effective July 1, 2024) regarding corporate governance and decision-making procedures. Major transactions should also follow internal resolution procedures. For transactions involving proprietary technologies and trademarks, it is recommended to cooperate with relevant experts or professionals.Intellectual property protection and corporate lawThe services are planned together; for transactions involving engineering and real estate, you can refer to the relevant information.Property sales and construction projectsThe key points of the operation.Business and contract disputes in enterprisesOur experience shows that conducting an effectiveness review upfront is the most cost-effective compliance measure.

5. Henglu Law Firm's Reminder

There are three common misconceptions in contract management: First, focusing only on the price and ignoring the terms, leaving the risks to the performance stage; Second, prioritizing signing over implementation, failing to confirm changes, extensions, or increases/decreases in workload in writing; Third, treating stamping as a way to avoid liability, ignoring situations where the other party lacks agency authority or the contract content violates the law. Enterprises should also pay attention to the compatibility between contracts and business models. For example, for credit sales, credit lines and guarantee measures should be set up; for consignment sales, rules on inventory, settlement, and returns should be agreed upon. Where similar disputes have occurred multiple times, it is recommended to conduct a special contract review to revise common issues all at once; framework agreements and strategic cooperation memoranda signed with external parties should also be included in the review scope to avoid the inclusion of substantive commitment clauses in them.Beijing Henglu Law FirmTip: The purpose of contract review is to make the business arrangement enforceable, not to derail the deal.

VI. Frequently Asked Questions

Q1: Can lawyers review contracts to avoid disputes?

It can reduce the probability of disputes and improve the position in disputes, but it cannot guarantee zero disputes. The value of review lies in confirming the validity of the contract, clarifying the rights and obligations, ensuring the availability of remedy clauses, and incorporating requirements for leaving traces of contract performance into the process. As for the risk of the other party's lack of integrity and market changes, the contract can only provide remedies after the fact and cannot eliminate them in advance.

Q2: What materials are required to review the contract?

It includes the contract text and attachments, the description of the transaction background, the counterparty's basic information and qualification documents, communication records, and the signed framework agreement. If it involves guarantees, intellectual property, or equity arrangements, corresponding rights certificates and internal resolutions should also be provided. The more complete the materials are, the more targeted the review opinions will be.

Q3: What is the approximate cost of contract review?

Usually, fees are charged per document or included in the scope of annual legal services, with the amount depending on the complexity of the contract, whether negotiation support is needed, and whether it involves multilingual issues. It is recommended to agree on the number of reviews, time limits, and rounds of amendments when placing an order, and to clarify how fees will be charged for exceeding the agreed limits to avoid disputes over additional costs arising at a later stage.

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

Standard contracts generally receive opinions within one to three working days, and the review period will be extended accordingly for complex transactions or those requiring negotiation. In urgent situations, the review can first focus on the effectiveness and risks of the core clauses, and the full opinion will be provided later. It is recommended to set aside review time in the signing plan and not to submit the contract for review on the same day of signing.

Q5: What should I do first?

First, sort out the existing contract templates and the main contracts of the past year, list them by amount and risk, and determine which ones must be submitted for review. Then, confirm the signing authority and the process of using stamps, and complete the authorization documents. Next, starting from the revision of standard templates and the implementation of contract management systems, implement the review conclusions into specific processes.

The above content is based on the judicial practice 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 relevant evidence to avoid missing the statutory time limit.Business and commercial legal services·Attorney Xue Suhua·Beijing Henglue 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. In the event of a dispute, please consult a practicing lawyer in a timely manner.