How a Business Advisor can complement Legal Counsel

A bilingual lawyer will go one step further to suggest that a basic bilingual template could be written as follows:

Force Majeure. Except with respect to the payment of money, neither party shall be liable for any failure or delay in its performance under this Agreement due to causes, including, but not limited to, acts of God, acts of civil or military authority, epidemics, earthquakes, riots, wars, sabotage, and governmental actions, which are beyond its reasonable control; provided that the delayed party: (i) gives the other party written notice of such cause and (ii) uses its reasonable efforts to correct such failure or delay in its performance.  The delayed party’s time for performance or cure shall be extended for a period equal to the duration of the cause.

不可抗力.除关于款项支付外，任何一方对于因下列其无法合理控制的原因引起的不能或迟延履行合同义务不承担责任，包括但不限于：天灾，民事或军事机构之行为，火灾，流行病，水灾，地震，暴动，战争，怠工，全国性的劳动力短缺或纠纷，政府行为。但迟延一方必须（1）给予相对方关于不可抗力事由的书面通知；（2）通过合理努力，减少迟延或不能履行合同带来的影响。迟延一方按本款 履行或纠正其行为的时间可按该不可抗力持续的时间作相应延长。

However, an experienced China Business Advisor should comment that:

In the US, for example, the scope of force majeure is generally limited to very large events like wars and “acts of God” such as natural disaster. As such, it is very rarely invoked.   Chinese businesspeople are more liberal in the scope of what they consider to be “beyond their control” and subject to force majeure.

Here are the two most common examples:

1. Changes to government policy. For example, if Beijing changes the tax code/ environmental law or export quota, it could have an impact on the Chinese party’s bottom line. They may try to invoke force majeure to nullify the contract and renegotiate.
2. Changes in the supply chain. For example, if a sub supplier goes out of business and forces the Chinese party to find a new sub-supplier at a higher cost, they may invoke force majeure as an excuse to raise the price to you.

In response, an experienced Chinese lawyer should explain:

Even if the Force Majeure term is removed from the contract, some Chinese courts may consider the concept of Force Majeure as being built into the Chinese legal system itself and applicable whether it is found in the specific contract or not. 

However, removing the Force Majeure clause makes it harder for the Chinese party or a Chinese judge to enforce Force Majeure. Therefore, we generally do not include a Force Majeure clause unless the client specially requests it, for example, in situations where the client is concerned that they may need the protection of Force Majeure on their end.