Everyone probably knows a negative story about his foreign colleague being screwed over. My colleague successfully sued a school (Okiki kindergarten in Shanghai). Now Shanghainese laws might not be applicable everywhere else, they might be on the contrary.
Underneath an brief account of how I think it works but you better check with your lawyer.
The law is not above the contract. The contract is above the law.
This sounds crazy but in practice it often turns out this way due to a manipulative system.
If you sign an illegal contract you are basically more a victim than the school is going to be due to the simple fact that you are in China and the school might have the right network and more financials to manipulate the system.
In other words if they screw you over for 60.000 you must be prepared to pay lawyer fees, have a lot of patience (sometimes up to a year) and end up with getting 10.000.
If the school does not live up to their financial obligations but still want you to sign a note which state that they did live up to all their financial obligations in order to get your release letter do the following.
you can still sign it but you should record using audio/video that clearly shows you are signing under protest, you do not agree with the content of the note and you only do it in order to get the release letter and get the follow up job.
Schools can not disapprove sick leave without a medical diagnosis from qualified medical personnel. Thus they can not deduct anymore than your daily wage if you refuse to come in.
Your expert certificate and residence permit should be in your possession not in the schools. They will abuse it to bargain with you if they screw up somewhere down the line.
There are good schools out there but there a a lot of rotten apples too.