Neither our regulation company nor any desirable law company I am conscious of ever sells China settlement templates. There are many reasons for this; however, it is common for templates to be in no way paintings for China, and they frequently may be a greater danger than having no contract. And yet, our China lawyers are continuously getting requested for “templates” for even incredibly complicated China deals. We had been asked for joint assignment template agreements, and our response to that is how we can even provide you with this kind of template until you realize the agreement’s terms.
I imply we’ve achieved joint mission agreements wherein our customer has contributed twenty million bucks to the joint venture. All they truly wanted out of it was guaranteed product pricing for the following 15 years. We have accomplished joint assignment offers where our client has supplied no cash — simply generation and system. In going back, we receive 60 percent possession of the joint venture and manipulate over pretty much the whole lot it does. Do you surely think we’ve got a template that covers every contingency?
Your attorney’s value is, in many instances, more in figuring out what a settlement ought to say than in absolutely drafting it, and the previous normally takes a good deal or extra time than the latter. Our China Manufacturing Agreements and our China Licensing Agreements are first-rate instances of this, and we get a lot of “template questions” on each of these. We are also frequently asked through capacity and actual clients whether it’d keep the cash to have their in-house legal professional or their much less-highly-priced neighborhood home lawyer draft such an agreement first, after which my company’s China attorneys use that draft settlement as our template. My answer to that query is typically something like the following:
We have drafted many Chinese licensing and production agreements and don’t use any of them as a “template.” We first acquire the data from our customers and discern which of our many contracts — if any — we have to use as a version in developing what will essentially be a brand-new settlement for you. Most of the time, we pull sections from more than one contract for a new, particularly customized agreement. Our agreements have been specially drafted for China, meaning they may be dual-language agreements with Chinese because of the reliable language. We usually (however, NOT constantly) draft them beneath Chinese law. We ensure that we draft every provision to advantage you as an overseas enterprise licensing its products or services in China or manufacturing its merchandise in China. Our present contract areas are nearly ready, as you can see. Therefore, it does not make sense to pay any other legal professional aware of Chinese regulations to create a contemporary English language contract that allows you to make sense for China.
Not only could the money you pay that lawyer go to waste, but my regulation company’s expenses could increase because instead of beginning with our very own Chinese and English contracts as models, we might be starting with an English language settlement so that it will now not be near what makes experience for what you are seeking to do in China. We would revise nearly every provision inside the agreement you supply us to make it China-suitable, and it might likely take us twice as much time to try this than for us to use our very own formerly drafted contracts as the foundation for yours. It is not helpful for us to have a common regulation settlement [China is a civil law system] primarily based on distinctly idealized and impractical American/European practice that has no applicability or use in China.
China employment documents offer another proper instance in which templates fall brief. We are often asked to draft China employment contracts for China WFOEs and China Joint Ventures. Our first reaction is to invite the ability patron whether their Chinese entity already has a set of Rules and Regulations (every so often referred to as a company guide or employee manual). If the solution to that question is certain, our legal professionals will use those rules to decide what has to go into the employment contracts.
If the purchaser does not now have any Rules and Regulations, our response is to say that we cannot draft the employment contracts standing alone; we need to draft both the employment contracts and a set of Rules and Regulations (and now and then, extra). Our reasoning on this is three-fold. Nearly all locales in China now require employers to have Rules and Regulations, particularly those with more than a handful of foreign companies. Two, having an employment settlement with no Rules and Regulations is like having a vehicle without an engine; it simply doesn’t paint. You can not discipline or terminate your employees without such rules and regulations. You are at a notable chance of your employment policies and choices being fodder for worker-employer disputes. The 0.33 purpose is each extra non-public and selfish: we do now not need our regulation firm’s name related to an approaching catastrophe. This third motive is why properly regulated corporations don’t sell templates now.
After we explain the need for Employer Rules and Regulations, the consumer will now and again request that we use our “model Rules and Regulations to keep charges down.” Again, we must explain why we don’t have any such model and why this model cannot work. Our typical response is something like the following:
Your Employer’s Rules and Regulations need to suit what you’re doing in China and where you are doing it. This approach allows us to provide you with Rules and Regulations to work. We should acquire all sorts of information before we can even start. If you are a manufacturing facility in Qingdao, we can’t even use the Rules and Regulations we did for an accounting firm in Qingdao months ago. Nor can we use the Rules and Regulations we did for a manufacturing facility in Suzhou three months before. We cannot even use the Rules and Regulations we did for a factory in Yantai six days ago due to fact. Even though Yantai and Qingdao are within an identical province, their employment legal guidelines and practices do not align. That factory in Yantai was difficult for its employees, and I remember that you must be considered a super company.