Drafting China Contracts That Work
By DAN HARRIS
There are three rules for making contracts enforceable in China:
Make the jurisdiction a China court.
Make the governing law Chinese law.
Make the governing language Chinese.
American companies routinely insist on contract provisions that effectively render their contracts unenforceable in China. By their own efforts, they make their contracts worthless, much to the amusement of the Chinese side of the transaction.
Calling for U.S. court jurisdiction is almost always a disaster because Chinese courts will not enforce U.S. court judgments. If, as is usually the case, the Chinese party has no assets in the United States, the U.S. judgment is effectively worthless.