Legal basis: Civil Code of People's Republic of China (PRC).
Article 388 To establish a security interest, a security contract shall be concluded in accordance with the provisions of this Law and other laws. Guarantee contracts include mortgage contracts, pledge contracts and other contracts with guarantee functions. Guarantee is a subsidiary contract of the main creditor's rights and debts contract. If the principal debt contract is invalid, the guarantee contract is invalid, unless otherwise stipulated by law. After the guarantee is confirmed invalid, if the debtor, guarantor and creditor are at fault, they shall bear corresponding civil liabilities according to their faults.
Article 389 The guarantee scope of a security interest includes the principal creditor's rights and interest, liquidated damages, damages, expenses for keeping the secured property and realizing the security interest. Unless otherwise agreed by the parties, such agreement shall prevail.