On May 12, Supreme Court promulgates the Application of the Contract Law (hereafter referred to as “Interpretation”). The Interpretation clarifies issues frequently dealt with the Contract Law in the judicial practice.

The Interpretation stipulates the application principle of circumstances change, several issues regarding to the formation and validity of contract which including place of contracting, clauses required to form a contract and mandatory provisions which infringement may invalidate contract. The Interpretation also adjust the liquidated damage for default, the set-off rules and revocation rights of the obligees.