law Mainland China English summary

Civil Code Article 505: Contracts Beyond Business Scope

《民法典》第505条:超越经营范围订立合同的效力

Statutory rule that contracts entered beyond business scope are not invalid merely for that reason; validity depends on the Civil Code's general rules and the contract chapter.

Brief English Introduction

Article 505 is the central modern rule on business-scope overreach. It rejects automatic invalidity and directs courts to evaluate the contract under ordinary Civil Code validity rules and any specific mandatory restrictions.

Use It For

Use it as the statutory baseline before reading ultra vires business-scope cases.

Teaching Notes

The provision is short, but it rewires older debates about corporate capacity and registered business scope.