Termination of Contracts in Hong Kong

Abstract This chapter examines how Hong Kong contract law has largely followed orthodox English contract law principles in relation to rights of termination for breach or non-performance. Where there is a variance between the two, Hong Kong law is almost always harsher, favouring commercial certainty over considerations of fairness. Among the principles examined are (i) the general principles upon which a right of termination will arise, (ii) the possibility of contractually providing for such a right, (iii) how a right to terminate is exercised, and (iv) the effects of termination. In addition to setting out Hong Kong law, the chapter also seeks to shed light on the confluence of factors that have led to this modern-day conservatism. These include, inter alia, (i) an unhealthy overemphasis on the supposed laissez-faire policies of the former British colonial government known as ‘positive non-intervention’; (ii) a heightened fear of ambiguity amplified by a perceived breakdown of ‘one country, two systems’; (iii) the dominance of commercial interests in Hong Kong’s Legislative Council and Election Committee for its chief executive; (iv) the continued role of senior British judges in the Special Administrative Region’s Court of Final Appeal; and (v) the all too human failure to give due credit to the role of Fortuna in the city’s success. Comparisons are also drawn to civilian contract law concepts to aid civilian readers in understanding Hong Kong law.