Legal risk management of stone purchase and sale

2019-10-19



Stone purchase and sale


1.1: Please note that "deposit" and "deposit" are not equal to "deposit"

When you sign a contract, you may require the other party to pay a deposit in order to ensure the performance of the contract. Since "deposit" has a specific legal meaning, you must indicate the word "deposit". If you use the words "deposit", "deposit" and so on, and do not clearly state in the contract that once the other party breaches the contract, it will not be returned, once the other party breaches the contract, it will be double returned, the court will not be able to treat it as a deposit.


1.2: please clarify the meaning of guarantee


If your business requires the other party to provide guarantee, when signing the guarantee contract with relevant customers, please be sure to state the clear meaning of the guarantor providing guarantee for the performance of the debt, avoid using the vague statements such as "responsible for settlement" and "responsible for coordination", otherwise the court will not be able to determine the establishment of the guarantee contract.


You may also provide warranties to others for business purposes. Whether you are a creditor or a guarantor, it is recommended that you specify the starting and ending points of the guarantee period when signing the guarantee contract. If you agree with the other party that the warranty period is longer than two years, the law will treat the warranty period as two years. If there is no clear agreement, the guarantee period will be regarded as six months from the date of expiry of the main debt performance period. Although the choice of "joint and several guarantee" or "general guarantee" depends on the negotiation between you and the customer, the guarantee contract must include the words "joint and several guarantee" or "general guarantee". If there is no clear agreement, the court will consider it as a joint and several liability guarantee.


If you are a creditor and the debt guaranteed by the "general guarantee" guarantee contract is not paid when it is due, you must file a lawsuit or arbitration with the debtor and the guarantor within the guarantee period. If the debt guaranteed by the guarantee contract in the form of "joint and several guarantee" is not paid after the expiration of the guarantee contract, please clearly require the guarantor to perform the guarantee obligation immediately in a demonstrable and effective way during the guarantee period. If you do not exercise your rights during the warranty period, the guarantor will exempt you from the warranty liability.


1.3: please register for mortgage guarantee


If your business requires the other party to provide mortgage guarantee, it is recommended that you and your client go through the registration formalities with the relevant registration authority immediately when signing the mortgage contract. Only the mortgage contract without going through the registration procedures may cause your rights and interests to lose the basis of realization. Unnecessary delay and delay may make your right inferior to other enterprises that have registered before you. If your client delays or refuses to assist you to go through the mortgage registration procedures after signing the mortgage contract, it is recommended that you file a lawsuit with the court as soon as possible and ask the court to help you to go through the registration procedures compulsively.


1.4: pledge guarantee please ensure the delivery of the pledged goods


If your business requires the other party to provide pledge guarantee, it is recommended that you handle the handover procedures of pledge collateral or right certificate with your customer immediately when signing the contract. If you only sign the pledge contract without actually occupying the pledge, the court will not be able to protect your request to realize the pledge right.

Precautions during the performance of the contract
2.1: Please perform the contractual obligations according to the contract
Contracts established according to law are protected by law. If the contract concluded between the enterprise and the customer does not violate the mandatory provisions of laws and administrative regulations or damage the public interest, it is an effective contract protected by law. Both parties have the obligation to strictly follow the agreement and fully perform the contract. No matter the name of the company is changed, the stock rights of the company are changed, or the legal representative, person in charge, or person in charge are changed, it can not be the reason for not performing the contract, which is also an important guarantee to maintain your and the business reputation of the company.
2.2.: please actively seek the dispute resolution method with the maximum benefit
Changes in the economic situation often lead to sharp fluctuations in the market price of goods. It is recommended that you do not easily choose to take the initiative to breach the contract, terminate the contract, or file a lawsuit to solve the problem. It is more conducive to reduce the loss to negotiate with your customers equally and find a solution acceptable to both parties. Even in the process of litigation, accepting mediation under the auspices of the court will be more conducive to the protection of the interests of enterprises. It may not be in your best interest not to actively seek a settlement and wait for a ruling.
2.3: please try to settle by bank
When you are determining the payment method, whether you are the payer or the payee, in addition to the small amount of transactions, please try to settle through the bank, cash settlement may cause you unnecessary trouble.
2.4: please pay attention to timely acceptance of goods and raise objections
The purchase of goods is a daily business of the enterprise. Please pay attention to the timely acceptance of the goods. If the goods are found not in conformity with the contract, please clearly raise an objection in writing to the other party as soon as possible within the time limit stipulated by the law or agreed in the contract. Unnecessary delay may result in your loss of claim right.
2.5: please do not disclose trade secrets
In the process of negotiation and performance of the contract, you often inevitably come into contact with the trading partner's business information or even business secrets. Please do not disclose or use these information after negotiation, performance of the contract or even performance, otherwise you may bear the corresponding responsibility.
2.6: please exercise the right of uneasy defense properly
In the process of performing the contract, if you have definite evidence to prove that the other party's business condition has seriously deteriorated, property has been transferred or capital has been withdrawn to avoid debts, business reputation has been lost or may be lost in other circumstances, you can timely notify the other party to perform the obligations you should perform first according to the contract, and wait for the other party to provide appropriate guarantee. After the suspension of performance, if the other party fails to resume its performance capability within a reasonable period of time and fails to provide appropriate guarantee, you may terminate the contract.
2.7: please raise the objection to terminate the contract on time
Once your customer informs you to terminate the contract and you have any objection to it, if there is an objection period stipulated in the contract, you must submit it in writing to the other party within the agreed period. If you raise an objection and bring a lawsuit to the court after the expiration of the agreed period, the court will not be able to support it; if there is no agreed period of objection in the contract, you must bring a lawsuit to the court within three months after the arrival of the notice of termination of the contract, otherwise the court will not be able to support your objection to the termination of the contract.
2.8: Please perform the obligation of impairment
If your customer defaults, no matter what the reason is, you should take measures in time to prevent the loss from expanding, and the reasonable expenses incurred will be borne by the defaulting party. If you passively treat and indulge the expansion of the loss, the court will not be able to protect the expanded loss.
2.9: please pay attention to the relevant provisions of limitation of action
The phenomenon of customers' default on payment of goods often occurs in the process of business operation. Please pay attention to the provisions of the law on the limitation of action. The limitation of action for requesting the court to protect civil rights is generally two years. You may also be reluctant to take drastic measures such as litigation and arbitration within two years due to factors such as maintaining the relationship with customers. In order to protect your rights from being lost due to the passage of time, you can handle your claims in an effective way such as sending letters or data messages to the other party before the expiration of the limitation period. In your letter, it is necessary to urge you to pay the overdue payment as soon as possible.


3.7: Please perform the duties of loyalty and diligence of senior executives in accordance with the law
The controlling shareholders, directors, supervisors and senior managers of the company have the duty of loyalty and diligence to the company. Please be sure to abide by the company law and other laws and regulations. Violation of these regulations may result in the liability for damages to the enterprise.
3.8: please protect the rights of minority shareholders in accordance with the law
Under the changing economic environment, it is more necessary for all shareholders to work together. Small and medium-sized shareholders and controlling shareholders are also investors of enterprises. Please treat them well, respect their right to participate and vote, protect their right to know, protect their right to profit distribution and other shareholders' rights.
3.9: Please convene the shareholders' meeting and the board of directors in accordance with the articles of Association
It's normal for investors of the company to have differences. We suggest that you follow the procedures stipulated in the articles of association to resolve the disputes. Before convening the shareholders' meeting, please inform the shareholders in accordance with the time limit, method and content stipulated in the articles of association. If you fail to fulfill the obligation of notice properly, the resolutions of the shareholders' meeting and the board of directors may be revoked by the court.
3.10: differences arise, consultation comes first
It is suggested that you resolve the internal differences of the company more by negotiation. Internal disputes are easy to lead to the deadlock of corporate governance, which may not only involve the company and shareholders in litigation, consume the company's human and material resources, but also lead to the dissolution of the company in extreme cases.
3.11: Please fulfill the liquidation obligation on schedule
A limited liability company invested and established by an enterprise may be closed for various reasons. Please pay attention to fulfill the liquidation obligations of investors on schedule. If the company's property is devalued, lost, damaged or the company's account books and important documents are lost due to the delay in fulfilling the liquidation obligation, the shareholders will face the risk of bearing all the debts of the subsidiary directly.

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