Consideration on Business Contract

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Bright Jon Attorney-at-law

1. Contract Consideration
It is a professional activity when a lawyer receives a client's
commission , to consider the contract according to the client's
request and the lawyer's professional judgement, through the ways of
examination, collation, analysis and other methods, if there is any
legal problems or other shortcoming or defect, the lawyer will offer
opinions to the client, while the client make commercial decision or
attend business negotiation.
Client , including the party who submit contract to the lawyer to
consider or a party as one of contract part. Other party，is one party
in interest besides client of the contract to consider .

2 . Points for Attention
Consideration is an activity that a lawyer give opinions about the
problems of contract basing on legal stipulations and the lawyer's
judgement.
The lawyer should remind the client of the clauses which is adverse
for him when consider the contract. Especially the clauses are totally
disadvantage to the client , important rights and interests haven't
been bargained , or contract is so deficient that some part or all
clauses of it will be invalid ，and whether accept the opinions or not
is depending on the client himself.

3. Contract Draft
When the client submit the draft of contract and annex about
backgound and reference, please use electronic documents as possible,
in order to keep and edit conveniently, annex may use PDF form. It
will be very advantageous if the client offer annex of contract ,
documents that mentioned in the contract and other party's Business
Licence, with all these above may help the lawyer to give right
opinions when consider contract.
Firstly, the client shall check the commercial clauses and technical
clauses, deside whether accept those clauses or not. Then, the lawyer
consider the contract clauses according to legal stipulations, add,
delete and amend the clauses, to reduce the relevant risk of the
client.

4. Purpose to Consider
4.1 When submit contract, backgound and reference documents, the
client shall initiatively provide information about background of
contract's conclusion, the information of both parties, whether the
client has advantage in transaction or not and so on, especially
confirm the purpose of the transaction and what the main problem is,
so the lawyer may judge the clauses.
4.2 When the client submit contract by email, should provide
information as key-points to consider, purpose of contract , and
background for consideration
4.3 If the client don't express the purpose and background of
contract, the lawyer may judge by himself or initiatively ask the
client about business background , contract purpose and other
information in order to finish the work.

5. Content of Consideration
For electronic documents, the lawyer will write postil to express his
amending opinions. The postil is in different color to identify from
the original draft.
While the clauses is vague or confusion , the lawyer may provide
opinions after getting exact reply , or just give indication such as
clauses can't understand or semantic unknown.

5.1 Subject Qualification
⑴ For Business Licence consider, shall accord with original documents
to check the other party's information such as duration of the
operation, business scope, whether pass the annual examination or not.
Then determine if its identity is according with the regulations of
industry and business.
⑵ For judging qualification level, shall consider their relevant
qualification certificates to determine whether it is legal, valid and
whether business activities are in the scope of legitimate.
⑶ For some specific transaction, shall consider the transaction
whether accord with the relevant production licences or operating
permits and other related licensing system to determine whether the
contract is valid.
⑷ For the transaction involving the professional qualifications ,
shall considerr the client's requirement or the necessarity to perform
the contract, consider if a professional has the appropriate
qualifications to perform the contract.

5.2 Consider Legality
⑴ Consider the clauses of the contract and the process of concluding
the contract, check the existence of the situation stipulated in
Contract Law such as contract invalid, exemption clause invalid, and
may apply to alteration or remove.
⑵ There is any agreed clause is in breach mandatory stipulation in
laws or regulations;
⑶ Consider the legal term and technical term mentioned in the contract
if they are standardized
⑷ Consider the quality standards of the transaction object if it is
consistent with the legal stipulation.
⑸ Consider it is consistent with the title of contract ,contract
content and attributes, in particular, if there is any conflict
between tiltle and content of the contract which is addressed
explicitly in the Specific Provisions of Contract Law.

5.3 Consider Practicality
The lawyers may accord with the type of the client's industry, product
characteristics, the other party's situation and so on , consider if
there are practicality clauses to avoid disputes or to set down the
rights and obligations. If it is only regular consider or the client
does not need such kind of consideration, then the lawyer may avoid
it.
⑴ Whether accord with the characteristics of the industry involved in
a transaction to define the respective responsibilities of each
parties;
⑵ Whether accord with the characteristics of the subject to make
clauses which avoid disputes;
⑶ Whether accord with characteristics of contract breaching, to make
the clauses of setting the responsibility;
⑷Whether accord with the other party's situation in the transaction to
set the practicality clauses
⑸The effect of the way ,the order, and the place to perform the
contract on transaction security.
⑹The effect of the clauses of express or implied jurisdiction clause
on the client.

5.4 Consider Clarity of Rights and Interests
⑴whether the content of transactions are clear, specific,
identifiable, and can be performed;
⑵Whether transaction procedures are clear, specific, time limit , and
obligation ascription;
⑶Whether the settlement of dispute is clear, specific, time limit, and
obligation ascription;
⑷ Whether there have defects in clauses, in order to accord with the
problems then make the rights and obligations unclear;
⑸ whether there is lacking strict interpretation as a result of which
the rights and obligations are unclear.
⑹whether rights, obligations and breach of contract are identifiable;
⑺Whether the annex content is clear, or conflict with the master
contract, if has, is there an order to explain.

[Contact]
Jiang Xiaoliang, Partner, Brighten Law Firm
Office Tel: +86-512-5669 6902 Fax: +86-512-5351 6040
em...@colaw.cn www.colaw.cn