First, the Yang contract in the Yin-Yang contract has no legal effect because it does not reflect the true meaning of the parties.
Second, dirty contracts are recognized as valid contracts because the parties express their true intentions. As long as the contents are legal, dirty contracts are also protected by law.
Third, if the yin-yang contract is used to commit an illegal act or to cover up the illegal purpose in a legal form, not only the disguised yin-yang contract is invalid, but also the disguised yin-yang contract is invalid because its contents are illegal.
Fourth, if the behavior of the seller and the buyer in signing the Yin-Yang contract seriously violates China's tax administration regulations, and the investigation by the relevant departments shows that it belongs to general tax evasion, the administrative organ has the right to impose administrative penalties such as fines and detention.
Fifth, an implied contract is regarded as a valid contract because of the true intention of the parties. As long as the content of implied contract is legal, it is also protected by law.
Sixth, if an illegal act is committed by using a yin-yang contract, or the illegal purpose is covered up in a legal form, not only the disguised yin-yang contract is invalid, but also the disguised yin-yang contract is invalid because its contents are illegal.
Legal basis: Article 148 of the Civil Code of People's Republic of China (PRC) * * * Where a party commits a civil legal act that makes his will express against his true meaning by fraudulent means, the defrauded party has the right to request the people's court or an arbitration institution to cancel it.
Article 149 If a third party commits a civil juristic act against its true meaning due to fraud, and the other party knows or should know about the fraud, the defrauded party has the right to request the people's court or an arbitration institution to cancel it.