If you do business with Chinese companies, this article might save you more money than any other 2 minutes of reading this year.
The sentence:
“In the event of breach by either party, all costs incurred by the non-breaching party in enforcing its rights — including attorney’s fees, notarization fees, travel expenses, appraisal fees, preservation fees, and court fees — shall be borne by the breaching party.”
Why this sentence matters so much in China
Under Chinese law, litigation costs follow the loser — but attorney’s fees do not, unless your contract says so. Without this clause, even when you win a lawsuit against a Chinese company, you typically absorb your own legal fees. On a $100,000 claim with $30,000 in legal costs, that’s a 30% haircut on your recovery.
With this clause, everything changes: attorney’s fees, notarization and apostille costs, translation, travel, asset preservation fees — all become part of your claim. The court will order the breaching party to pay them, and they become enforceable just like the principal.
Practical notes
- Chinese language version rules.If your contract is bilingual, Chinese courts work from the Chinese text. Have the clause translated properly and make sure both versions match — a sloppy translation can void the clause when you need it most.
- It also disciplines the other side.Chinese counterparties know exactly what this clause means. Its presence alone reduces the odds you’ll ever need it.
- Already in a dispute without this clause?All is not lost — other fee-shifting bases exist, and preservation plus negotiation pressure often achieves the same result. But going forward, add the sentence.
Already facing a breach — with or without this clause? — and mention this article; we’ll walk you through the fee-recovery options in your specific case.
