Judgment Standards of Chinese Courts when Impediments to Performance of Contracts Arise in International Trade Contracts

Abstract

Purpose: This paper analyzes trends in court rulings as well as application of the law to China's international trade activities in contract disputes caused by COVID-19. Research design, data, and methodology: This paper adopts a case study approach by analyzing the application of legal provisions to the judicial practice of Chinese courts in international contractual disputes for goods related to the pandemic. Results: Case analysis shows that COVID-19 is an obstacle to the performance of China's international trade contracts, and Chinese courts still follow the principle of first examining whether there is a force majeure clause in the contract between the parties. Conclusions: This paper suggests it is necessary to include specific contractual provisions relating to hardship and force majeure in order to establish the intended allocation of contractual risk well in advance.