1. China Contract Damages
This must be China contract damages week. I say that because in
cleaning up months of emails I came across three interesting emails
on contract damages (similar to liquidated damages under
common law). Before I discuss those three emails, I will explain
what contract damages are and why they are so important in just
about all China contracts.
Contract damages refers to a contract provision setting out the
damages for breach. The typical contract might have a provision
saying if Party X breaches this contract, Party Y is entitled to
$100,000 in contract damages. Some contracts we write will have
more than one contract damages provision. For instance, we might
write a distribution agreement that provides for $300,000 in
contract damages for a distributor breaching the contract by
stealing our client's IP and another contract damages provision
providing for 1% a month in contract damages for late payments.
