The fault in contracting refers to the fault that one of the contracting parties caused the non establishment or invalidity of the contract in the process of contracting before the establishment of the contract. The liability of a party for such fault is called contracting fault liability. The liability for fault in contracting includes the compensation liability for the damage suffered by the counterpart due to the non establishment or invalidity of the contract.
 [Legal Basis]
 Article 157 of the Civil Code of the People's Republic of China states that after a civil juristic act is invalid, revoked or determined not to be effective, the property acquired by the actor as a result of the act shall be returned; If the goods cannot be returned or it is unnecessary to return them, they shall be compensated at a discount. The party at fault shall compensate the other party for the losses incurred therefrom; If all parties are at fault, they shall bear their respective responsibilities. If the law provides otherwise, such provisions shall prevail.