Q: What are the legal suggestions for precontract?
From:
Justice Bureau of Shenzhen Municipality
Updated:
2021-08-11 15:08
A: It is better to sign a contract when the parties have agreed on the critical items such as price, subject and quantity. For any open items, they can use a supplementary contract to set these items down later. This will enable them to avoid using a precontract in some circumstances.
However, if a precontract is inevitable, the parties need to set forth calculation methods on the liquidated damage or at least an amount of liquidated damage for the default party who refuses to conclude a formal contract after a precontract became effective.