VII

According to Criminal Law of China, any person or unit will be found guilty of the crime of contract fraud and bear criminal responsibility if they perform one of the following acts in order to illegally obtain the property of the other party in the process of signing and fulfilling a contract: (1) signing a contract in the name of a fictitious unit or fraudulently using another person’s name; (2) making assurances with forged, altered or voided bills or other false certificates of property rights; (3)without actual performance capability, tricking the other into continuing to sign and to perform the contract by small-scale contracts or partial performance of contracts; (4) receiving the goods, debit,prepayments or the property secured by the other party; and (5) defrauding the other party’s property by other methods.

Case: On July 15, 2013, Z used false identity information to establish Company A which had a registered capital of RMB 1 million yuan, and none of the shareholders actually contributed capital.From July to October, 2013, Z negotiated with victim Company B and its operator X about the movie shooting, and signed a Letter of Intent for Co-production of a Film (single film) with Company B on behalf of A.Later, Z lied that he had obtained a film production license (single film), and signed a Movie Co-production Cooperation Agreement with X.Z provided materials(such as Work Plan of the Film Team, Application Form for Film Projects, Employment Contract for Film Casting Personnel, and Employment Contract for Associate Directors, etc.), fabricated the reasons for paying the costs of actors, directors, and photographic equipment, and requested Company B to send money via mail, WeChat, etc.During that period, Z deceived Company B eight times to pay a total of more than RMB 7.23 million yuan in project costs.((2014) Chang Xing Chu Zi No.1015)(https://www.daowen.com)

The court held that: The behavior of Z constitutes contract fraud.Z used the joint production of a film as bait.During the process of signing and performing the contract, Z defrauded Company B by fabricating the costs of employees and equipment.Z tricked Company B into continuing to perform the contractual obligation to pay the investment in installments by partly performing the contract, such as paying the screenwriting fee and the filming ceremony preparation fee.Z’s illegal income,which he had no intention of returning, was all used for himself and his relatives rather than contractual matters.Based on the circumstances,the court finally ruled that Z was guilty of contract fraud.