Freedom of contract is a concept that is often discussed in jurisdictions around the world, particularly in common law jurisdictions where contract law – at least as it applies in a commercial context – is still embodied primarily in case law rather than in statute, and adopts a relatively laissez-faire approach to regulating private commercial contracts (i.e. contracts between commercial parties as distinct from consumer contracts).
On occasion, however, the courts and legislatures in common law jurisdictions intervene to impose limitations on the concept of freedom of contract. An example of court intervention is the law governing restraint of trade or non-compete clauses, where the courts have imposed the requirement for such clauses to be reasonable. (For a discussion about non-compete clauses, see Non-compete clauses in China Business Law Journal, March 2015.)
A former partner of Linklaters Shanghai, Andrew Godwin teaches law at Melbourne Law School in Australia, where he is an associate director of its Asian Law Centre. Andrew’s new book is a compilation of China Business Law Journal’s popular Lexicon series, entitled China Lexicon: Defining and translating legal terms. The book is published by Vantage Asia and available at www.vantageasia.com.