China Contracts: Dispute Resolution Clauses
In his China Law Blog, Dan Harris writes that the dispute resolution provision in China contract may be the most important provision in the contract.
“If you put in a dispute resolution provision that makes sense, your Chinese company counter-party with whom you are contracting will be afraid to breach the contract. Conversely, if you put into the contract a dispute resolution provision that will not work, you are signaling to your Chinese company counter-party that it can breach its contract with you with impunity. Yes, it really is that important,” Harris writes in the blog post.
He explains why a provision calling for resolution in U.S. courts can sometimes be a hindrance, compared to a clause requiring dispute resolution to take place in Chinese courts.
