In English and Chinese, there are several terms that are used to describe the law that is applied to interpret a contract and to resolve any questions concerning the rights and obligations of the parties under the contract, including the remedies available in the case of breach. This column will look at the following three terms and consider whether there are any differences between them:
- Governing law
- Applicable law
- Proper law
Happily, for lawyers and others who draft and negotiate contracts in English and Chinese, it appears that the way each of these terms is used in English and Chinese is broadly the same.
This column will also consider the situation that arises when the parties to a contract do not make provision for the law that should be used to interpret a contract, and the principles of private international law that apply in common law jurisdictions and in China. Although this is a complex area of law, there are a few fundamental principles that guide lawyers and courts in determining which law should be used in this situation. It must be borne in mind, however, that different jurisdictions adopt different approaches in resolving this question.
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.