[Posted on the official website] Mining companies, please note: Mining rights can now be used as collateral for loans! Officially implemented from June 15

Article 2: Should the agreement signed by the government to attract investment be ignored if it is said not to be counted? The Supreme Court has already made it clear

2021, Funing, Jiangsu. Boss Wang signed the expropriation compensation agreement with a cheerful face, and the compensation plan was written down in black and white on the paper - the loss of factory buildings, equipment, and suspension of production and business, adding up to nearly 10 million yuan. The agreement was stamped with the seal of the government, and Boss Wang felt at ease.

In 2026, a letter was sent to Boss Wang. The content is very concise: the agreement from that year is invalid, and you have to come back to make up the difference, otherwise you will not get new compensation.

Boss Wang was confused: "Isn't this signed in black and white? How can it be scrapped at the drop of a hat?"

The case in Funing is causing shock among business owners across the country.

Administrative agreements are not waste paper, but the premise is that you must know how to protect yourself

Many business owners have a misunderstanding: An agreement signed with the government is the same as a contract signed with ordinary people. The other party can renege on it if they want. This idea is dead wrong.

There is one fundamental difference between an administrative agreement and an ordinary civil contract—one of its parties is the government. The government must act in accordance with the law and cannot "change on the spur of the moment".

The judicial interpretation of the Supreme People's Court specifically clarifies: Once an administrative agreement is signed, the government wants to unilaterally change or abolish it, and there is only one situation - that is, it may seriously damage national interests and social public interests. It is legally untenable to tear up an agreement just because it "feels inappropriate", "leadership has changed" or "policy has changed".

In the case of Funing, the government played a "double kill mode" - it not only invalidated the original agreement, but also forced you to pay the difference. This practice has long been ruled illegal in typical cases of the Supreme People's Court.

Six key points that you must keep in mind when signing an agreement

So, how can business owners protect themselves when they sign an agreement with the government?

First, verbal promises do not count and must be written into the contract in black and white.If the government officials said during the inspection that "the land price is negotiable" and "tax exemptions are no problem" are not written into the agreement, you will have no choice but to turn your back on them in the future.

Second, preferential policies must be written clearly and not vaguely.Expressions such as "give the maximum discount" and "implement in accordance with relevant regulations" are too vague, and it is easy to waffle during implementation. If you want to write, write specific numbers, specific proportions, and specific deadlines.

Third, the liability for breach of contract must be clear, and the government must also bear responsibility for breach of contract.Many agreements only describe how to deal with corporate defaults, leaving aside government defaults. A good agreement should clearly state what responsibilities the government will bear and how it will compensate if it fails to perform as agreed.

Fourth, keep the originals of all signing materials.Keep the original agreement, meeting minutes, correspondence, audio and video recordings, whatever you can. These are all evidence in the event of a lawsuit in the future.

Fifth, confirm whether the contracting party has legal authorization.The person who signed the contract with you is the town government, but the land belongs to the county government; the person who signed the contract with you is the Investment Promotion Bureau, but the promises are made by the Finance Bureau - in this case where the main body does not correspond, the validity of the agreement may be problematic.

Sixth, if you encounter problems during the implementation of the agreement, communicate in writing and leave traces in a timely manner.The government's oral replies and the leadership's new commitments all require written confirmation from the other party. If you communicate by phone, you will send an email or text message to confirm afterwards.

What should business owners do if the government breaks a contract?

If unfortunately the government breaks the contract, there are two ways to go:

The first is to apply for administrative reconsideration.Within 60 days after receiving the government’s decision to unilaterally change or abrogate the agreement, you can apply for administrative review to the higher-level government or relevant departments to request the cancellation of the decision.

The second is to file an administrative lawsuit.Within 6 months after receiving the decision, an administrative lawsuit can be filed in court. The Supreme People's Court has made it clear that administrative agreement disputes fall within the scope of administrative litigation, and the court will review whether the government's decision is legal and whether it damages the legitimate rights and interests of the enterprise.

Yingting lawyer reminds

This Funing case is a wake-up call for all business owners: administrative agreements are not waste paper, but the prerequisite is that you must know how to protect yourself.

Many business owners are confused when signing the agreement, and only think of calling a lawyer when something goes wrong - by which time it is often too late. Once the agreement is signed, the evidence is in black and white. If the terms are not standardized and complete, it will be very difficult to win a lawsuit.

Therefore, it is the most cost-effective investment to consult a lawyer before signing an agreement.

Yingting Law Firm has rich practical experience in the field of administrative agreements and has helped a large number of business owners safeguard their legitimate rights and interests in investment promotion, expropriation and compensation, and government-enterprise cooperation projects. If you are negotiating cooperation or signing an agreement with the government, you are welcome to contact us for a "premarital physical examination" - it is much better to keep the risk out than to file a lawsuit if something goes wrong.

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Source: Yingting Law Firm