Model Clauses for Contracting in Asia
The Model Clauses provide (to the extent possible) parties entering into cross-border contracts, governed by the laws of select jurisdictions, with a framework that is neutral as to the governing law chosen as well as the subject matter of the contract. That is, each model clause is designed to ensure that it “works” (i.e., is enforceable) irrespective of which Jurisdiction is selected as the governing law and irrespective of the subject matter of the contract.
Date of Publication: March 2023
Publication Format: PDF only
CPD Points : N/A
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When a business in one country (country A) contracts with a business in a second country (country B), a question arises: the laws of which country should govern any disputes between us about this contract? The laws of country A or country B? Or another country (country C)? The answer to this question is complicated by the heterogeneity of contract law across countries. Specifically, contract law, the source of contract law, legal labels and language all vary across countries.
Given these issues, the choice of law made by the parties will often result in one of the parties entering into a contract governed by the laws of a jurisdiction with which they are not familiar. Further, if the parties choose a third law (often called a neutral governing law) to govern their contract (e.g., the laws of country C), this may result in both parties being unfamiliar with the laws that govern their contract.
Unfamiliarity causes uncertainty and uncertainty increases the cost of doing business across borders.
The Model Clauses aim to ameliorate some of the above problems by providing (to the extent possible) parties entering into cross-border contracts, governed by the laws of select jurisdictions, with a framework that is neutral as to the governing law chosen as well as the subject matter of the contract. That is, each model clause is designed to ensure that it “works” (i.e., is enforceable) irrespective of which Jurisdiction is selected as the governing law and irrespective of the subject matter of the contract.
Jurisdictions considered by the Model Clauses are:
- Civil law and hybrid jurisdictions: China, Indonesia, Japan, the Philippines, Thailand and Vietnam
- Common law: Australia, England and Wales, India, Malaysia, New York law, Singapore
This is a fully-cited, 113-page publication where contents are internally and externally hyperlinked to offer readers an easier navigation experience.
Table of content
Background
Understanding the Problem
Understanding the Model Contract Clauses
Limitations
Contract Laws of Asia
Acknowledgements
References
Governing law clause
Model clause
Specifying the jurisdiction whose laws govern Purpose
Specifying the laws of the selected jurisdiction that govern (and those that don’t)
Specifying what the specified laws of the selected jurisdiction govern
Variations
References
Third-party indemnity clause
Model clause
Purpose
The language of the obligation
Disentitling conduct
Machinery of the parties’ obligations
Variations
References
Limitation of liability clause
Model clause
Purpose
Breach-of-contract damages for which the parties are not liable under the law
Breach-of-contract damages for which the parties are liable under the law
Limiting liability for breach-of-contract damages
Exemptions from the limited liabilities
Variations
References
Appendices
Excluding the CISG
Model clause
Purpose
Application of the CISG
Excluding the CISG
References
Defining legal standards of conduct
Understanding legal standards of conduct
Understanding the problems
Defining legal standards of conduct
References