Comparing Time Limit Laws For Filing Lawsuits: Chinese Civil Code vs. Convention on the International Sale of Goods (CISG)

When it comes to legal rules in commercial transactions, the time limits for filing lawsuits are critical. This article compares the time limit regulations as outlined in Article 188 of the Chinese Civil Code and Article 39 of the Convention on the International Sale of Goods (CISG), exploring their impact and the protection they offer.

 

Time Limit Rules: China vs. International Standards

Chinese Civil Code, Article 188

This article sets a three-year statute of limitations for starting legal proceedings. This period begins when the person whose rights have been infringed knows or should have known about the infringement and who is responsible. This approach takes into account both the awareness of the rights being violated and the identification of the responsible party.

 

CISG, Article 39

The CISG, dealing with international sales contracts, specifies a two-year limit, starting from when the buyer receives the goods. This focuses on the actual delivery of goods as the start point for the time limit.

 

Which Offers More Protection?

Article 188 of the Chinese Civil Code is more favorable due to its longer, three-year timeframe, allowing for greater flexibility in recognizing and responding to rights violations. This can be particularly important in cases where the infringement or the responsible party is not immediately clear.

On the other hand, the two-year limit under the CISG might be restrictive, especially in complex transactions where issues may emerge slowly.

 

The Advantage of Excluding CISG in China

Though there are similarities between the CISG and the Chinese Civil Code, their differences can significantly impact legal disputes. Excluding the CISG in favor of Chinese law can be beneficial:

  1. Simplicity in Legal Matters: Relying on a single legal system can simplify legal complexities.
  2. Predictability: Understanding outcomes based on the uniform application of Chinese law aids in business planning.
  3. Customized Solutions: The Chinese legal framework can offer remedies and protections more aligned with domestic practices.
  4. Efficient Dispute Resolution: Focusing on one legal framework can streamline legal proceedings for arbitrators and lawyers.

 

Conclusion

The choice between the Chinese Civil Code and the CISG greatly affects the timeframe for filing lawsuits in commercial transactions. Article 188 of the Chinese Civil Code, with its longer period, offer better protection in most cases. Choosing to exclude the CISG in favor of Chinese law lead to clearer, more predictable legal processes. This decision is key for those involved in transactions under Chinese jurisdiction, ensuring their rights are adequately protected and adjudicated.

 

FAQs

1. What is the statute of limitations according to Article 188 of the Chinese Civil Code?

  • Article 188 sets a three-year statute of limitations for initiating legal action, starting from when the right holder knows or should have known about the rights infringement and the identity of the responsible party.

2. How does CISG Article 39’s statute of limitations differ?

  • CISG Article 39 specifies a two-year limitation period for legal action, which begins from the date the buyer actually receives the goods.

3. Why might Article 188 of the Chinese Civil Code offer better protection?

  • The three-year period under Article 188 provides a longer window to recognize and act upon rights infringements, which can be crucial in complex situations where the infringement or the obligor is not immediately apparent.

4. What are the benefits of excluding CISG in transactions under Chinese law?

  • Excluding CISG can lead to clearer legal proceedings, greater predictability, tailored legal solutions more aligned with Chinese practices, and more efficient dispute resolution.

6. Can parties choose between the Chinese Civil Code and CISG in a contract?

  • Yes, parties involved in international contracts can agree to exclude CISG and instead follow the provisions of the Chinese Civil Code, or vice versa.

7. What is the significance of the time limit in legal disputes?

  • Time limits are crucial as they determine the period within which a party must initiate legal action. Failing to act within this period can result in the loss of the right to seek legal remedy.

8. How does the choice of legal framework impact business planning?

  • Choosing a specific legal framework helps businesses predict legal outcomes, plan risk management strategies, and ensure compliance with relevant laws.

Contact us if you need legal help in China, like drafting effective cease and desist letters, drafting contracts that follow Chinese law and are enforceable in China, background investigation of Chinese companies, protecting patents, trademarks, copyright, and verification of contracts to the law in China, help with trade and IP disputes in China, etc.

If you require our assistance or have further questions about our services, please do not hesitate to contact our Customer Relationship Manager, Jan Erik Christensen, at janerik@ncbhub.com. We look forward to hearing from you and helping your business succeed in China.

Contact us if you need help with drafting of contracts that follows Chinese laws and are enforceable in China, background investigation of Chinese companiesprotecting patents, trademarks, verification of contracts to the law in China, or help with other legal challenges that you have in China.

If you require our assistance or have further questions about our services, please do not hesitate to contact our Customer Relationship Managers Jan Erik Christensen, at janerik@ncbhub.com  or Milla Chen, at huimin.chen@ncbhub.com. We look forward to hearing from you and helping your business succeed in China.