Risks of Doing Business in China - avoiding pitfalls and horrors : Contract Law 101

Do your homework : due diligence is crucial in any business venture, especially the legal protection and liability of doing business in a foreign country.

China: Contract Management – Avoiding the Horror Stories

20 December 2011

Article by Matthew McKee

Source : Mondaq : Corporate / Company Law

There are very many stories about doing business in China – some exceptionally successful, others diabolical failures. These include foreign companies entering into contracts with Chinese companies that do not exist or the joint venture partner who was a "friend" that appropriates all the assets; unknowingly the joint venture was setup in a way to leave the foreign company with no legal recourse.

Our experience is that what makes these disaster stories worse is that they are usually easily avoidable. Whilst some fear that the enforcement of legal rights in China is somewhat of a hopeless endeavour, our experience is that in reality obtaining a just result is very achievable.

Practice Point 1 – Know who you are contracting with.

Practice Point 2 – Obtaining judgment in an Australian court may be worthless

Practice Point 3 – Avoiding Chinese Courts

Practice Point 4 – Be aware of limitation periods

Practice Point 5 – Proper documentation

http://www.mondaq.com/x/158312/Contract+Law/China+Contract+Management+Avoiding+the+Horror+Stories