Should the government’s investment promotion agreement be scrapped at the drop of a hat? The law has your back!

There is something I must tell all business owners——

In Funing, Jiangsu, a boss signed an expropriation compensation agreement with the government in 2021, and the compensation plan was spelled out in black and white. As a result, this year the government said: Sorry, the agreement is invalid, and you have to come back to pay the difference.

The boss was so angry that he almost flipped the table over.

This kind of thing is not uncommon in our private enterprise circles. The government promised a bunch of conditions when attracting investment. Once the companies started production, the land was acquired, policies changed, and leaders changed, the promises made back then became useless paper.

But I want to tell you today:This approach is legally untenable.

An administrative agreement is not "a piece of paper"

Many people can't tell what the agreement signed by the government is.

A contract signed between ordinary enterprises is called a civil contract, which emphasizes "autonomy of will" and can be modified by consensus of both parties.

But the one signed by the government and enterprises is calledadministrative agreement. Its nature is different - the government has power, and once the agreement is signed, it becomes legally binding and cannot be abolished at will.

The judicial interpretation of the Supreme Court specifically states: Once an administrative agreement is signed, if the government wants to unilaterally change or abrogate it, there is only one situation—that is, it is possibleSeriously harming national interests and social public interests.

Do you want to tear up the agreement just because you "feel inappropriate", "leadership has changed", or "policy has been adjusted"? The court did not support it.

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

The law backs you up: the principle of trust protection

Speaking of which, I have to introduce a concept to you:trust protection principle.

What does it mean? To put it simply - the government must keep its word. Enterprises have made investments, signed contracts, and invested costs based on the government's commitment. At this time, the government cannot turn its back on the company.

This is the basic requirement of "honest government".

Therefore, if the government breaks the contract, business owners should not be afraid. The law has your back.

What should I do if this happens?

Step one: Keep all evidence

Keep all the documents, correspondence, payment records, and various government commitments from the time of signing, whether oral or written. Evidence is the basis for defending your rights.

Step 2: Claim rights promptly

Administrative litigation has a 6-month prosecution period, and administrative reconsideration is 60 days. If the statute of limitations is missed, the court will ignore it.

Step 3: Find a professional lawyer

Administrative agreement cases are much more complex than ordinary civil cases, involving multiple dimensions such as government behavior, laws and regulations, and procedural requirements. It is easy to suffer a loss if you carry it yourself.

Yingting lawyer reminds

When dealing with the government, "the ugly words always come first."

Before signing the agreement, you must pay attention to three points: 1.Oral promises don’t count, must be written in black and white in the contract 2.Clearly write down preferential policies, cannot be vaguely expressed 3.Liability for breach of contract must be clear, the government will also be held responsible for breach of contract

If your company is negotiating an investment agreement with the government, or encounters a situation where the agreement is torn up, don’t hesitate to find a lawyer to intervene.

The law is your biggest supporter.

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To defend your rights in government-enterprise disputes, find Yingting lawyer

Beijing Yingtong Law Firm focuses on the fields of government-enterprise disputes and administrative litigation, helping business owners keep their "contracts" with the government.

(Note: This article is for general reference only and does not constitute legal advice. Please consult a professional lawyer for specific questions)