The Role of Contract Law in Developing the Chinese Legal Culture

The economic reforms initiated during the past decade in China have created an additional need for legal reforms. One reform which greatly affects commercial transactions between Chinese and foreign entities is the establishment of a legal framework for analyzing contractual relationships. This Article outlines some of the provisions of the Economic Contract Law, which governs contracts between Chinese entities, and the Foreign Economic Contract Law, which governs contracts used in foreign trade. After noting the interdependence of these laws, the author examines the treatment of several issues which are of great concern to foreign businesses, including choice of law, contract formation, performance and breach of contractual obligations, and dispute resolution. The author strongly recommends that contracts with Chinese parties follow the language of the Chinese contract laws, in order to assure enforceability