Simply put—in order to achieve the exchange of benefits, specific parties negotiate and reach agreement on a combination of various conditions to bind all parties to certain behaviours or inaction—this is a contract. The conditions for transaction as the content of the contract, are reached by the parties based on the information they hold over the subject matters of the transaction. Due to the complexity of transactions, differences in the capacities of the parties (including technical capacity, capital capacity, etc.), and factors such as information asymmetry, contracts are often incomplete in many respects, which may lead to incentive or transaction cost issues. Therefore, using contract theory to analyse the negotiation of transaction conditions and how contracts will be fulfilled can help us better understand transactions based on the ‘interaction between the system and behaviour’, especially regarding the issue of uncertainty, which are more adaptive for intangible assets like intellectual property. Observing the relevant systems and judicial decisions of intellectual property law in China from the perspective of contract theory in economics can enrich the methodology for analysing whether there are flaws in institutional construction and operation, thereby enhancing the theoretical solidness and persuasiveness of institutional improvement.