Chapter VI. Defenses to Formation of Contracts - Validity Issues

With regard to the Contract Law, the validity of a contract determines whether the contract will be effective and legally binding to the contractual parties. This chapter presents a case, which explains the situation where the government approval is required for certain contract and how the requirement is enforced specifically. Traditionally, as a justification under the law, a contract that is defective in the capacity of the parties is either void or voidable. In China, however, a majority of contract law scholars prefer to use the term of effect-to-be-determined instead of 'void' or 'voidable' to characterize the contract where a party has the limited capacity. When making a contract, the parties may agree to attach certain conditions on which the contract would be affected. In addition to the conditions, the Contract Law also allows the parties to subject the validity of the contract to a time period.Keywords: contract law; validity issues; void contracts; voidable contracts