Ethical due Diligence across Borders: Why Contract Clauses are not Enough

This article examines the extent to which contractual mechanisms with overseas distributors, commercial agents and other intermediaries can discharge, or credibly support, human-rights and environmental due-diligence duties in global value chains. Using a doctrinal and normative analysis that brings agency and distribution law into conversation with the UN Guiding Principles on Business and Human Rights and Directive (EU) 2024/1760, it distinguishes the forms of leverage available across subsidiaries, suppliers, distributors, agents and other intermediaries. The article argues that contractual clauses remain indispensable for defining standards, generating information, creating procedural leverage, shaping incentives and structuring remediation, but that their capacity to shift legal responsibility is structurally limited by information asymmetry, enforceability constraints and mandatory law. It therefore rejects a model of ethics clauses as standalone devices for downstream risk transfer. Instead, it proposes an integrated model in which risk-based partner selection, calibrated contractual controls, continuous monitoring, corrective action and responsible exit operate as a continuous governance cycle. The main conclusion is that contract can operationalise due diligence, but cannot substitute for it.