Risks in shipbuilding and Chinese law

Shipbuilding encompasses commercial, technical and legal risks. Risk allocation and management in the shipbuilding industry are particularly significant for shipbuilding countries such as China. Considering risks of defective performance under shipbuilding contracts, Professor James Zhengliang Hu and Dr Meixian Song analyse the legal implications of risks embedded in shipbuilding contracts from the perspective of Chinese law and the shipbuilding industry in China.

In English law certain distinctions exist between contracts categorised as relating to the sale and purchase of goods and those relating to the supply of work manship and materials. A shipbuilding contract is traditionally categorised as a contract of sale and purchase. ¹ In contrast, under Chinese law it is classified as a contract for hired work. ²