Most contracts (for example. B for employment contracts, joint ventures, etc.) may be subject to foreign laws under Chinese law and regulations. However, the parties may continue to opt for Chinese legislation as existing legislation in their treaty, since Chinese parties are generally very reluctant to have foreign law as existing legislation. This discussion is animated by the bargaining power of each party. One advantage if Chinese laws are considered law is that in the event of a dispute, Chinese judges and arbitrators will be able to deal with the case more effectively than if the contract were governed by foreign law. The risks are reduced. HJM performed due diligence for a Beijing company in early 2013. Our investigation showed that this company was well organized; Company executives collaborated during due diligence and company documents were readily available. However, officials stated that this was the first time they had heard and experienced due diligence. Although Chinese law allows the use of foreign language contracts, all evidence presented to a court must be in Chinese in the event of a dispute. It is therefore strongly recommended to use a bilingual contract and to establish Chinese as the dominant language in which the counterparty is a national enterprise. If there is no dominant language, a Chinese court or arbitral tribunal will define Chinese as the dominant language. That is why we propose to Chinese companies to make available contracts of five (5) and ten (10) pages that contain only the necessary clauses, i.e.
the terms and conditions, the rights and obligations of each party, how the contract can be terminated, the consequences of an infringement, the terms of payment and the settlement of disputes and the language conflict. In recent times, business searches and credit checks have become increasingly common, not only for foreign companies wishing to conduct transactions with a Chinese company, but also for Chinese companies wishing to do business or to establish links between them. c. Electronic contracts: contracts that have been duly concluded by e-mail, fax and other electronic methods are valid under Chinese law.