The PRC Contract Law - (Part 3) As deep as it gets.

Below are some practical constraints and best practices with respect to the PRC Contract Law. Although quite general, some of the issues below also apply to many other transactions under PRC law.

IIII. Practical Constraints

• China does not follow a system of judicial precedent, and without a case law system it can be difficult to resolve complex contract issues. **(However judicial interpretations by the PRC Supreme Court are binding.)

• There is no formal system of discovery in China, therefore gathering and compelling evidence can sometimes be mission impossible.

• Judgements in PRC courts are often political and protectionist.

• In many cases, the laws that apply to a particular contract case can be found in many different places, often with no translations, and these laws regularly are in conflict.

IIV. Best Practices
• At the drafting stage it is important to gather as much information from the local party as possible.

• Independent legal advice from local Mandarin speaking lawyers is advisable if you do not have relevant expertise in a particular area.

• In the event of a dispute, arguments should be based on the legal framework and the principles of the law, rather than its application through cases.

• When conflicts between PRC laws exist, it is prudent to follow the law or regulation issued by the higher decision making body.