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China Business Contract Checklist

A comprehensive guide to essential clauses and considerations for commercial contracts in China

15 min readUpdated Dec 2024

Introduction

When conducting business in China, contract compliance and completeness are crucial. This guide provides a detailed checklist to help international companies ensure their business contracts in China comply with local laws and effectively protect their interests.

Essential Clauses Checklist

Party Information

Subject Matter

Price and Payment

Legal Requirements Compliance

Chinese Contract Law Requirements

  • Contracts must be in written Chinese form (for important contracts)
  • Contract terms must not violate Chinese laws and regulations
  • Foreign-related contracts must comply with foreign investment regulations
  • Contracts in specific industries require relevant department approval

Foreign Exchange Management Requirements

  • Cross-border payments must comply with foreign exchange regulations
  • Large transactions require SAFE filing
  • Exchange rate risk sharing clause design

Risk Mitigation Clauses

Commercial Risks

Breach of Contract Liability

Clearly specify liability for breach by each party, including calculation methods and limits for damages.

Force Majeure

Define the scope of force majeure events and notification procedures, clarifying conditions for liability exemption.

Legal Risks

Intellectual Property Protection

Clarify intellectual property ownership and usage rights, establish infringement liability clauses.

Confidentiality Obligations

Specify the scope and duration of trade secret protection, establish consequences for violations.

Dispute Resolution Mechanisms

Negotiation and Mediation

Prioritize amicable negotiation for dispute resolution, with possible mediation institutions and procedures.

Advantages:Low cost, quick resolution, preserves business relationships

Arbitration

Choose recognized arbitration institutions such as China International Economic and Trade Arbitration Commission (CIETAC).

Advantages:Professional expertise, confidentiality, enforceable awards

Litigation

Choose courts with jurisdiction, typically at the defendant's domicile or contract performance location.

Note:Public proceedings, higher costs, longer duration

Final Compliance Checklist

Document Preparation

Execution Preparation

Need Professional Assistance?

Our professional legal team can provide contract review and drafting services to ensure your business contracts fully comply with Chinese legal requirements.